ADTN : NASDAQ : Technology
$20.55 -0.05 | -0.24%
Today's Range: 19.7 - 20.55
Avg. Daily Volume: 348700.0
12/02/16 - 3:06 PM ET

Financial Analysis


ADTRAN INC's gross profit margin for the third quarter of its fiscal year 2016 is essentially unchanged 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. ADTRAN INC is extremely liquid. Currently, the Quick Ratio is 2.04 which clearly shows the ability to cover any short-term cash needs. The company managed to increase its liquidity from the same period a year ago, despite already having strong liquidity to begin with. This would indicate improved cash flow.

During the same period, stockholders' equity ("net worth") has remained unchanged 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 Q3 FY16 Q3 FY15
Net Sales ($mil)168.89158.08
EBITDA ($mil)15.6512.5
EBIT ($mil)12.078.99
Net Income ($mil)12.427.07


Balance Sheet Q3 FY16 Q3 FY15
Cash & Equiv. ($mil)121.81125.77
Total Assets ($mil)655.56671.85
Total Debt ($mil)27.928.8
Equity ($mil)478.2477.64


Profitability Q3 FY16 Q3 FY15
Gross Profit Margin47.7746.92
EBITDA Margin9.267.9
Operating Margin7.155.69
Sales Turnover0.930.9
Return on Assets5.093.3
Return on Equity6.974.65
Debt Q3 FY16 Q3 FY15
Current Ratio3.162.81
Debt/Capital0.060.06
Interest Expense0.140.15
Interest Coverage84.4359.52


Share Data Q3 FY16 Q3 FY15
Shares outstanding (mil)48.7149.56
Div / share0.090.09
EPS0.260.14
Book value / share9.829.64
Institutional Own % n/a n/a
Avg Daily Volume337194.0410872.0

Valuation


HOLD. The current P/E ratio indicates a discount compared to an average of 32.47 for the Communications Equipment industry and a premium compared to the S&P 500 average of 25.16. To use another comparison, its price-to-book ratio of 2.03 indicates a discount versus the S&P 500 average of 2.79 and a significant discount versus the industry average of 3.57. 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, ADTRAN INC 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
ADTN 28.91 Peers 32.47   ADTN 41.90 Peers 14.62

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

ADTN is trading at a discount to its peers.

 

Premium. 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.

ADTN is trading at a significant premium to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
ADTN 27.14 Peers 19.18   ADTN 0.33 Peers 0.93

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

ADTN is trading at a significant premium 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.

ADTN 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
ADTN 2.03 Peers 3.57   ADTN 64.28 Peers 77.07

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.

ADTN 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, ADTN is expected to 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
ADTN 1.59 Peers 3.14   ADTN 1.28 Peers 12.45

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.

ADTN 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.

ADTN significantly trails its peers on the basis of sales growth

 

 

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