Alliance Data Systems Corp

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ADS : NYSE : Financial
$244.04 | %
Today's Range: 241.24 - 245.42
Avg. Daily Volume: 637900.0
05/26/17 - 4:02 PM ET

Financial Analysis

ALLIANCE DATA SYSTEMS CORP's gross profit margin for the first quarter of its fiscal year 2017 has increased 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. ALLIANCE DATA SYSTEMS CORP is extremely liquid. Currently, the Quick Ratio is 2.03 which clearly shows the ability to cover any 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 decreased by 21.69% 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 FY17 Q1 FY16
Net Sales ($mil)1879.01676.1
EBITDA ($mil)478.3472.7
EBIT ($mil)353.5344.3
Net Income ($mil)146.4141.2

Balance Sheet Q1 FY17 Q1 FY16
Cash & Equiv. ($mil)2411.51497.0
Total Assets ($mil)24642.722399.1
Total Debt ($mil)20670.717930.9
Equity ($mil)1363.51741.2

Profitability Q1 FY17 Q1 FY16
Gross Profit Margin44.5440.11
EBITDA Margin25.4528.2
Operating Margin18.8120.54
Sales Turnover0.310.29
Return on Assets1.772.43
Return on Equity32.0831.32
Debt Q1 FY17 Q1 FY16
Current Ratio2.092.44
Interest Expense125.298.8
Interest Coverage2.823.48

Share Data Q1 FY17 Q1 FY16
Shares outstanding (mil)55.859.0
Div / share0.520.0
Book value / share24.4429.51
Institutional Own % n/a n/a
Avg Daily Volume638722.0584672.0


BUY. ALLIANCE DATA SYSTEMS CORP's P/E ratio indicates a premium compared to an average of 30.61 for the IT Services industry and a premium compared to the S&P 500 average of 25.02. Conducting a second comparison, its price-to-book ratio of 9.60 indicates a significant premium versus the S&P 500 average of 3.00 and a premium versus the industry average of 9.31. The price-to-sales ratio is below the S&P 500 average and is well below the industry average, indicating a discount. After reviewing these and other key valuation criteria, ALLIANCE DATA SYSTEMS CORP proves to trade at a premium to investment alternatives within the industry.

1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
ADS 31.08 Peers 30.61   ADS 5.76 Peers 21.27

Average. An average P/E ratio can signify an industry neutral price for a stock and an average growth expectation.

ADS is trading at a valuation on par with 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.

ADS is trading at a significant discount to its peers.

1 2 3 4 5
premium   discount
  Price to
1 2 3 4 5
premium   discount
ADS 11.03 Peers 21.60   ADS 0.20 Peers 1.55

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

ADS is trading at a significant discount to 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.

ADS trades at a significant discount to its peers.

1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
ADS 9.60 Peers 9.31   ADS -15.08 Peers -6.96

Average. 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.

ADS is trading at a valuation on par with its peers.


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

However, ADS is expected to significantly trail its peers on the basis of its earnings growth rate.

1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
ADS 1.73 Peers 5.43   ADS 16.39 Peers 11.84

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.

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


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

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



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