Alliance Data Systems Corp

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ADS : NYSE : Financial
$236.54 -2.08 | -0.87%
Today's Range: 232.55 - 238.08
Avg. Daily Volume: 655400.0
07/21/17 - 4:04 PM ET

Financial Analysis


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.

During the same period, stockholders' equity ("net worth") has decreased by 17.62% from the same quarter last year.

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Income Statement Q2 FY17 Q2 FY16
Net Sales ($mil)1821.81748.9
EBITDA ($mil)0.0450.2
EBIT ($mil)0.0320.6
Net Income ($mil)137.773.1


Balance Sheet Q2 FY17 Q2 FY16
Cash & Equiv. ($mil)2493.11821.6
Total Assets ($mil)25728.322771.2
Total Debt ($mil)21706.818581.7
Equity ($mil)1424.81729.7


Profitability Q2 FY17 Q2 FY16
Gross Profit Margin0.041.22
EBITDA Margin0.025.74
Operating Margin0.018.33
Sales Turnover0.30.3
Return on Assets1.952.13
Return on Equity35.2428.16
Debt Q2 FY17 Q2 FY16
Current Ratio0.02.23
Debt/Capital0.940.91
Interest Expense137.5103.7
Interest Coverage0.03.09


Share Data Q2 FY17 Q2 FY16
Shares outstanding (mil)55.858.6
Div / share0.520.0
EPS2.471.24
Book value / share25.5329.52
Institutional Own % n/a n/a
Avg Daily Volume660530.0627500.0

Valuation


BUY. The current P/E ratio indicates a discount compared to an average of 31.03 for the IT Services industry and a premium compared to the S&P 500 average of 24.66. For additional comparison, its price-to-book ratio of 9.35 indicates a significant premium versus the S&P 500 average of 3.07 and a discount versus the industry average of 10.05. The price-to-sales ratio is below the S&P 500 average and is well below the industry average, indicating a discount. Upon assessment of these and other key valuation criteria, ALLIANCE DATA SYSTEMS CORP 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
ADS 27.18 Peers 31.03   ADS 5.62 Peers 20.16

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

ADS is trading at a discount 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 11.15 Peers 23.07   ADS 0.18 Peers 1.67

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 9.35 Peers 10.05   ADS 9.47 Peers 8.14

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.

 

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

ADS is expected to have an earnings growth rate that exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
ADS 1.74 Peers 5.83   ADS 13.19 Peers 12.37

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.

 

Average. Comparing a company's sales growth to its industry helps to determine if the company is adding or losing market share.

ADS is keeping pace with its peers on the basis of sales growth.

 

 

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