ALLIANCE DATA SYSTEMS CORP's gross profit margin for the second quarter of its fiscal year 2014 is essentially unchanged when compared to the same period a year ago. The company managed to grow both sales and net income at a faster pace than the average competitor in its industry this quarter as compared to the same quarter a year ago. ALLIANCE DATA SYSTEMS CORP is extremely liquid. Currently, the Quick Ratio is 2.21 which clearly shows the ability to cover any short-term cash needs. The company managed to increase its liquidity from the same period a year ago, despite already having strong liquidity to begin with. This would indicate improved cash flow.
At the same time, stockholders' equity ("net worth") has greatly increased by 63.09% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is very unlikely to face financial difficulties in the near future.
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|Income Statement||Q2 FY14||Q2 FY13|
|Net Sales ($mil)||1265.16||1028.09|
|Net Income ($mil)||137.44||116.44|
|Balance Sheet||Q2 FY14||Q2 FY13|
|Cash & Equiv. ($mil)||1202.95||1259.05|
|Total Assets ($mil)||14214.9||11867.31|
|Total Debt ($mil)||10283.35||9123.33|
|Profitability||Q2 FY14||Q2 FY13|
|Gross Profit Margin||38.08||39.76|
|Return on Assets||3.69||3.78|
|Return on Equity||55.48||77.23|
|Debt||Q2 FY14||Q2 FY13|
|Share Data||Q2 FY14||Q2 FY13|
|Shares outstanding (mil)||54.03||48.74|
|Div / share||0.0||0.0|
|Book value / share||17.53||11.92|
|Institutional Own %||n/a||n/a|
|Avg Daily Volume||561779.0||983082.0|
BUY. This stock's P/E ratio indicates a premium compared to an average of 26.70 for the IT Services industry and a significant premium compared to the S&P 500 average of 19.69. For additional comparison, its price-to-book ratio of 14.71 indicates a significant premium versus the S&P 500 average of 2.72 and a significant premium versus the industry average of 8.44. The price-to-sales ratio is well above the S&P 500 average, but well below the industry average. After reviewing these and other key valuation criteria, ALLIANCE DATA SYSTEMS CORP proves to trade at a premium to investment alternatives within the industry.
|ADS 31.96||Peers 26.70||ADS 13.25||Peers 16.32|
Premium. A higher P/E ratio than its peers can signify a more expensive stock or higher growth expectations.
ADS is trading at a premium to its peers.
Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.
ADS is trading at a discount to its peers.
|ADS 17.73||Peers 18.65||ADS 0.48||Peers 1.19|
Premium. A higher price-to-projected earnings ratio than its peers can signify a more expensive stock or higher future growth expectations.
ADS is trading at a premium to its peers.
Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.
ADS trades at a significant discount to its peers.
|ADS 14.71||Peers 8.44||ADS 19.73||Peers 18.47|
Premium. A higher price-to-book ratio makes a stock less attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.
ADS is trading at a significant premium to its peers.
Average. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.
ADS is expected to keep pace with its peers on the basis of earnings growth.
|ADS 2.94||Peers 4.44||ADS 19.43||Peers 7.41|
Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.
ADS is trading at a significant discount to its industry on this measurement.
Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.
ADS has a sales growth rate that significantly exceeds its peers.
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