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ABCO : NASDAQ : Services
$42.06 | %
Today's Range: 41.46 - 42.64
Avg. Daily Volume: 334,300
08/26/16 - 4:00 PM ET

Financial Analysis


ADVISORY BOARD CO's gross profit margin for the second quarter of its fiscal year 2016 has increased when compared to the same period a year ago. Even though sales increased, the net income has decreased, representing a decrease to the bottom line. ADVISORY BOARD CO has weak liquidity. Currently, the Quick Ratio is 0.88 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.

At the same time, stockholders' equity ("net worth") has significantly decreased by 27.90% 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 FY16 Q2 FY15
Net Sales ($mil)198.38183.58
EBITDA ($mil)38.7830.35
EBIT ($mil)19.8611.85
Net Income ($mil)7.57.67


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)17.4949.55
Total Assets ($mil)1903.82111.03
Total Debt ($mil)568.02564.28
Equity ($mil)425.94590.83


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin52.2848.82
EBITDA Margin19.5416.53
Operating Margin10.016.46
Sales Turnover0.420.31
Return on Assets-4.55-0.61
Return on Equity-20.37-2.18
Debt Q2 FY16 Q2 FY15
Current Ratio0.911.03
Debt/Capital0.570.49
Interest Expense4.395.27
Interest Coverage4.532.25


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)40.2642.55
Div / share0.00.0
EPS0.180.18
Book value / share10.5813.89
Institutional Own % n/a n/a
Avg Daily Volume332392.0527908.0

Valuation


HOLD. This stock’s P/E ratio is negative, making its value useless in the assessment of premium or discount valuation, only displaying that the company has negative earnings per share. Conducting a second comparison, its price-to-book ratio of 3.99 indicates a premium versus the S&P 500 average of 2.82 and a significant discount versus the industry average of 7.90. The price-to-sales ratio is above the S&P 500 average, but well below the industry average. After reviewing these and other key valuation criteria, ADVISORY BOARD CO 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
ABCO NM Peers 34.49   ABCO 12.14 Peers 16.92

Neutral. The absence of a valid P/E ratio happens when a stock can not be valued on the basis of a negative stream of earnings.

ABCO's P/E is negative making this valuation measure meaningless.

 

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.

ABCO 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
ABCO 20.58 Peers 20.36   ABCO NA Peers 1.44

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

ABCO is trading at a premium 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.

Ratio not available.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
ABCO 3.99 Peers 7.90   ABCO -543.75 Peers 99.45

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.

ABCO 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, ABCO 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
ABCO 2.11 Peers 3.69   ABCO 22.40 Peers 40.45

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.

ABCO 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.

ABCO significantly trails its peers on the basis of sales growth

 

 

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