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TheStreet Open House
HSN Inc
HSNI : NASDAQ : Services
$60.09 0.51 | 0.86%
Today's Range: 59.67 - 60.61
Avg. Daily Volume: 214,200
09/19/14 - 12:15 PM ET

Financial Analysis


HSN INC'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. Even though sales increased, the net income has decreased. HSN INC has weak liquidity. Currently, the Quick Ratio is 0.77 which shows a lack of ability to cover short-term cash needs. The company's liquidity has increased from the same period last year, indicating improving cash flow.

During the same period, stockholders' equity ("net worth") has increased by 11.80% 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 Q2 FY14 Q2 FY13
Net Sales ($mil)855.2812.61
EBITDA ($mil)78.1781.25
EBIT ($mil)67.3771.3
Net Income ($mil)40.9443.28


Balance Sheet Q2 FY14 Q2 FY13
Cash & Equiv. ($mil)122.3391.98
Total Assets ($mil)1259.421179.3
Total Debt ($mil)234.38246.88
Equity ($mil)521.98466.86


Profitability Q2 FY14 Q2 FY13
Gross Profit Margin36.6238.0
EBITDA Margin9.149.99
Operating Margin7.888.77
Sales Turnover2.742.84
Return on Assets13.3912.59
Return on Equity32.3231.79
Debt Q2 FY14 Q2 FY13
Current Ratio1.891.9
Debt/Capital0.310.35
Interest Expense1.861.71
Interest Coverage36.3241.67


Share Data Q2 FY14 Q2 FY13
Shares outstanding (mil)52.3953.23
Div / share0.250.18
EPS0.760.79
Book value / share9.968.77
Institutional Own % n/a n/a
Avg Daily Volume218054.0266297.0

Valuation


BUY. The current P/E ratio indicates a significant discount compared to an average of 435.44 for the Internet & Catalog Retail industry and a value on par with the S&P 500 average of 19.67. To use another comparison, its price-to-book ratio of 5.95 indicates a significant premium versus the S&P 500 average of 2.72 and a significant discount versus the industry average of 11.54. The price-to-sales ratio is well below both the S&P 500 average and the industry average, indicating a discount. Upon assessment of these and other key valuation criteria, HSN INC proves to trade at a discount 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
HSNI 18.99 Peers 435.44   HSNI 13.71 Peers 38.58

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

HSNI is trading at a significant discount 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.

HSNI is trading at a significant 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
HSNI 17.13 Peers 56.16   HSNI NM Peers 0.97

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

HSNI is trading at a significant discount to its peers.

 

Neutral. 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.

HSNI's negative PEG ratio makes this valuation measure meaningless.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
HSNI 5.95 Peers 11.54   HSNI 17.29 Peers 167.07

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.

HSNI 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, HSNI 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
HSNI 0.90 Peers 4.01   HSNI 3.12 Peers 28.87

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.

HSNI 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.

HSNI significantly trails its peers on the basis of sales growth

 

 

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