Alliance Data Systems Corp

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ADS : NYSE : Financial
$243.79 | %
Today's Range: 242.045 - 245.7
Avg. Daily Volume: 561500.0
03/24/17 - 4:02 PM ET

Financial Analysis


ALLIANCE DATA SYSTEMS CORP's gross profit margin for the fourth 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, representing a decrease to the bottom line. ALLIANCE DATA SYSTEMS CORP is extremely liquid. Currently, the Quick Ratio is 2.06 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 17.50% 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 Q4 FY16 Q4 FY15
Net Sales ($mil)2069.31748.85
EBITDA ($mil)548.8489.11
EBIT ($mil)421.4364.08
Net Income ($mil)10.6144.38


Balance Sheet Q4 FY16 Q4 FY15
Cash & Equiv. ($mil)2215.21656.19
Total Assets ($mil)25514.122421.83
Total Debt ($mil)20948.717177.98
Equity ($mil)1658.22010.03


Profitability Q4 FY16 Q4 FY15
Gross Profit Margin42.0541.28
EBITDA Margin26.5227.96
Operating Margin20.3620.82
Sales Turnover0.290.29
Return on Assets1.692.45
Return on Equity26.0727.43
Debt Q4 FY16 Q4 FY15
Current Ratio2.122.54
Debt/Capital0.930.9
Interest Expense117.789.36
Interest Coverage3.584.07


Share Data Q4 FY16 Q4 FY15
Shares outstanding (mil)57.460.88
Div / share0.520.0
EPS0.182.35
Book value / share28.8933.02
Institutional Own % n/a n/a
Avg Daily Volume553445.0611039.0

Valuation


HOLD. ALLIANCE DATA SYSTEMS CORP's P/E ratio indicates a premium compared to an average of 29.22 for the IT Services industry and a premium compared to the S&P 500 average of 26.73. To use another comparison, its price-to-book ratio of 8.48 indicates a significant premium versus the S&P 500 average of 2.98 and a significant discount versus the industry average of 9.98. The price-to-sales ratio is below the S&P 500 average and is well below 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
ADS 33.48 Peers 29.22   ADS 6.74 Peers 20.95

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

ADS 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.

ADS 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
ADS 11.59 Peers 21.57   ADS 0.22 Peers 1.39

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.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
ADS 8.48 Peers 9.98   ADS -17.39 Peers 4.34

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.

ADS is trading at a discount to 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.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
ADS 1.91 Peers 5.54   ADS 14.59 Peers 12.42

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 exceeds its peers.

 

 

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