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
Debt/Capital0.940.91
Interest Expense125.298.8
Interest Coverage2.823.48


Share Data Q1 FY17 Q1 FY16
Shares outstanding (mil)55.859.0
Div / share0.520.0
EPS2.582.35
Book value / share24.4429.51
Institutional Own % n/a n/a
Avg Daily Volume638722.0584672.0

Valuation


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.


Price/Earnings
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.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
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.

 
Price/Book
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.

 
Price/Sales
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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