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The Ultimate Software Group Inc
ULTI : NASDAQ : Technology
$193.43 -4.21 | -2.13%
Today's Range: 192.77 - 197.57
Avg. Daily Volume: 341,600
05/03/16 - 3:59 PM ET

Financial Analysis


ULTIMATE SOFTWARE GROUP INC's gross profit margin for the first quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Even though sales increased, the net income has decreased. ULTIMATE SOFTWARE GROUP INC has very weak liquidity. Currently, the Quick Ratio is 0.16 which clearly shows a lack of ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.

During the same period, stockholders' equity ("net worth") has increased by 14.34% from the same quarter last year. The key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the near future.

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Income Statement Q1 FY16 Q1 FY15
Net Sales ($mil)187.21144.88
EBITDA ($mil)15.4315.0
EBIT ($mil)9.339.76
Net Income ($mil)2.444.16


Balance Sheet Q1 FY16 Q1 FY15
Cash & Equiv. ($mil)96.32122.72
Total Assets ($mil)1860.171301.31
Total Debt ($mil)10.3610.02
Equity ($mil)325.76284.91


Profitability Q1 FY16 Q1 FY15
Gross Profit Margin64.6664.02
EBITDA Margin8.2410.35
Operating Margin4.986.73
Sales Turnover0.360.41
Return on Assets1.123.22
Return on Equity6.4314.74
Debt Q1 FY16 Q1 FY15
Current Ratio1.051.1
Debt/Capital0.030.03
Interest Expense0.00.0
Interest Coverage0.00.0


Share Data Q1 FY16 Q1 FY15
Shares outstanding (mil)28.7928.65
Div / share0.00.0
EPS0.080.14
Book value / share11.319.94
Institutional Own % n/a n/a
Avg Daily Volume346297.0251405.0

Valuation


BUY. ULTIMATE SOFTWARE GROUP INC's P/E ratio indicates a significant premium compared to an average of 49.40 for the Software industry and a significant premium compared to the S&P 500 average of 23.99. For additional comparison, its price-to-book ratio of 17.15 indicates a significant premium versus the S&P 500 average of 2.74 and a significant premium versus the industry average of 7.13. The price-to-sales ratio is well above both the S&P 500 average and the industry average, indicating a premium. Upon assessment of these and other key valuation criteria, ULTIMATE SOFTWARE GROUP 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
ULTI 277.20 Peers 49.40   ULTI 47.87 Peers 23.15

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

ULTI is trading at a significant premium to its peers.

 

Premium. 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.

ULTI is trading at a significant premium to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
ULTI 47.55 Peers 89.20   ULTI 0.83 Peers 0.69

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

ULTI is trading at a significant discount 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.

ULTI trades at a premium to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
ULTI 17.15 Peers 7.13   ULTI -51.05 Peers -17.10

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.

ULTI is trading at a significant premium to its peers.

 

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

However, ULTI 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
ULTI 8.46 Peers 5.49   ULTI 24.66 Peers 5.56

Premium. 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.

ULTI is trading at a significant premium to its industry.

 

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

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

 

 

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