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EXFO Inc
EXFO : NASDAQ : Technology
$4.19 -0.09 | -2.10%
Today's Range: 4.12 - 4.28
Avg. Daily Volume: 25,200
05/02/16 - 3:13 PM ET

Financial Analysis


EXFO INC's gross profit margin for the second quarter of its fiscal year 2016 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. EXFO INC has strong liquidity. Currently, the Quick Ratio is 1.93 which shows the ability to cover 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.

During the same period, stockholders' equity ("net worth") has remained virtually unchanged only decreasing by 1.75% from the same quarter last year. The key liquidity measurements indicate that the company is unlikely to face financial difficulties in the near future.

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Income Statement Q2 FY16 Q2 FY15
Net Sales ($mil)53.650.99
EBITDA ($mil)4.970.77
EBIT ($mil)3.76-1.51
Net Income ($mil)3.960.93


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)44.3832.94
Total Assets ($mil)225.53227.8
Total Debt ($mil)0.460.0
Equity ($mil)173.37176.46


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin64.7361.67
EBITDA Margin9.261.51
Operating Margin7.01-2.95
Sales Turnover0.991.02
Return on Assets3.812.31
Return on Equity4.962.99
Debt Q2 FY16 Q2 FY15
Current Ratio2.732.59
Debt/Capital0.00.0
Interest Expense0.00.0
Interest Coverage0.00.0


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)53.9553.86
Div / share0.00.0
EPS0.070.02
Book value / share3.213.28
Institutional Own % n/a n/a
Avg Daily Volume25029.025953.0

Valuation


BUY. EXFO INC's P/E ratio indicates a premium compared to an average of 24.72 for the Communications Equipment industry and a premium compared to the S&P 500 average of 23.99. To use another comparison, its price-to-book ratio of 1.34 indicates a discount versus the S&P 500 average of 2.74 and a significant discount versus the industry average of 3.33. 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
EXFO 28.80 Peers 24.72   EXFO 13.38 Peers 16.45

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

EXFO 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.

EXFO 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
EXFO 14.90 Peers 18.09   EXFO 0.17 Peers 1.39

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

EXFO is trading at a valuation on par with 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.

EXFO trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
EXFO 1.34 Peers 3.33   EXFO 66.66 Peers 48.42

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.

EXFO is trading at a significant discount to its peers.

 

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

EXFO is expected to have an earnings growth rate that significantly exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
EXFO 1.04 Peers 3.07   EXFO -3.52 Peers 6.79

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.

EXFO 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.

EXFO significantly trails its peers on the basis of sales growth

 

 

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