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Edgewater Technology Inc
EDGW : NASDAQ : Technology
$7.01 | %
Today's Range: 7.00 - 7.06
Avg. Daily Volume: 9,400
05/01/15 - 3:59 PM ET

Financial Analysis


EDGEWATER TECHNOLOGY INC's gross profit margin for the first quarter of its fiscal year 2015 has decreased 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. EDGEWATER TECHNOLOGY INC is extremely liquid. Currently, the Quick Ratio is 2.29 which clearly shows the ability to cover any short-term cash needs. The company's liquidity has decreased from the same period last year, indicating deteriorating cash flow.

During the same period, stockholders' equity ("net worth") has increased by 6.86% 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 Q1 FY15 Q1 FY14
Net Sales ($mil)26.5827.61
EBITDA ($mil)-0.621.53
EBIT ($mil)-0.841.28
Net Income ($mil)-0.940.71


Balance Sheet Q1 FY15 Q1 FY14
Cash & Equiv. ($mil)18.9217.78
Total Assets ($mil)96.4986.34
Total Debt ($mil)0.00.0
Equity ($mil)74.6569.86


Profitability Q1 FY15 Q1 FY14
Gross Profit Margin28.7636.6
EBITDA Margin-2.335.54
Operating Margin-3.184.65
Sales Turnover1.161.25
Return on Assets2.542.05
Return on Equity3.2351.97
Debt Q1 FY15 Q1 FY14
Current Ratio2.432.72
Debt/Capital0.00.0
Interest Expense0.00.0
Interest Coverage0.00.0


Share Data Q1 FY15 Q1 FY14
Shares outstanding (mil)11.5811.17
Div / share0.00.0
EPS-0.080.06
Book value / share6.456.25
Institutional Own % n/a n/a
Avg Daily Volume9342.016867.0

Valuation


BUY. EDGEWATER TECHNOLOGY INC's P/E ratio indicates a significant premium compared to an average of 25.42 for the IT Services industry and a significant premium compared to the S&P 500 average of 20.38. For additional comparison, its price-to-book ratio of 1.09 indicates a significant discount versus the S&P 500 average of 2.81 and a significant discount versus the industry average of 9.63. The price-to-sales ratio is well below both the S&P 500 average and the industry average, indicating a discount.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
EDGW 39.17 Peers 25.42   EDGW 15.71 Peers 19.10

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

EDGW 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.

EDGW 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
EDGW 13.56 Peers 20.52   EDGW 24.33 Peers 3.61

Average. An average price-to-projected earnings ratio can signify an industry neutral stock price and average future growth expectations.

EDGW is trading at a valuation on par with 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.

EDGW 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
EDGW 1.09 Peers 9.63   EDGW -93.73 Peers 21.13

Discount. 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.

EDGW is trading at a significant discount to its peers.

 

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

However, EDGW 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
EDGW 0.73 Peers 5.17   EDGW 3.95 Peers 8.86

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.

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

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

EDGW significantly trails its peers on the basis of sales growth

 

 

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