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Airgas Inc
ARG : NYSE : Basic Materials
$142.45 -0.05 | -0.04%
Today's Range: 142.35 - 142.57
Avg. Daily Volume: 754,400
04/28/16 - 3:59 PM ET

Financial Analysis


AIRGAS INC's gross profit margin for the third quarter of its fiscal year 2015 is essentially unchanged when compared to the same period a year ago. Sales and net income have dropped, although the growth in net income underperformed the average competitor within the industry, the revenue growth did not. AIRGAS INC has weak liquidity. Currently, the Quick Ratio is 0.56 which shows a lack of ability to cover short-term cash needs. The liquidity decreased from the same period a year ago, despite already having weak liquidity to begin with. This would indicate deteriorating cash flow.

During the same period, stockholders' equity ("net worth") has decreased by 5.25% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q3 FY15 Q3 FY14
Net Sales ($mil)1295.411331.82
EBITDA ($mil)235.62246.44
EBIT ($mil)147.28163.29
Net Income ($mil)73.8693.2


Balance Sheet Q3 FY15 Q3 FY14
Cash & Equiv. ($mil)46.8873.59
Total Assets ($mil)6180.875989.98
Total Debt ($mil)2702.132424.38
Equity ($mil)1975.472085.1


Profitability Q3 FY15 Q3 FY14
Gross Profit Margin57.2455.75
EBITDA Margin18.1818.5
Operating Margin11.3712.26
Sales Turnover0.860.88
Return on Assets5.626.15
Return on Equity17.617.68
Debt Q3 FY15 Q3 FY14
Current Ratio1.121.21
Debt/Capital0.580.54
Interest Expense15.1413.67
Interest Coverage9.7311.94


Share Data Q3 FY15 Q3 FY14
Shares outstanding (mil)72.2875.03
Div / share0.60.55
EPS1.011.23
Book value / share27.3327.79
Institutional Own % n/a n/a
Avg Daily Volume805746.01476965.0

Valuation


BUY. AIRGAS INC's P/E ratio indicates a premium compared to an average of 23.06 for the Chemicals industry and a premium compared to the S&P 500 average of 24.17. Conducting a second comparison, its price-to-book ratio of 5.19 indicates a significant premium versus the S&P 500 average of 2.76 and a premium versus the industry average of 5.07. The current price-to-sales ratio is similar to the S&P 500 average, but it is below the industry average, indicating a discount. After reviewing these and other key valuation criteria, AIRGAS INC proves to trade at a premium to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
ARG 30.62 Peers 23.06   ARG 14.52 Peers 18.11

Premium. A higher P/E ratio than its peers can signify a more expensive stock or higher growth expectations.

ARG is trading at a significant 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.

ARG is trading at a discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
ARG 27.31 Peers 19.40   ARG 33.28 Peers 2.56

Premium. A higher price-to-projected earnings ratio than its peers can signify a more expensive stock or higher future growth expectations.

ARG is trading at a significant premium to its peers.

 

Premium. 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.

ARG trades at a significant premium to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
ARG 5.19 Peers 5.07   ARG -5.13 Peers 63.35

Average. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

ARG is trading at a valuation on par with its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, ARG is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
ARG 1.93 Peers 2.18   ARG 0.95 Peers -3.72

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.

ARG is trading at a discount to its industry on this measurement.

 

Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.

ARG has a sales growth rate that significantly exceeds its peers.

 

 

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