Avon Products Inc

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AVP : NYSE : Consumer Goods
$3.46 -0.09 | -2.54%
Today's Range: 3.45 - 3.58
Avg. Daily Volume: 6027700.0
05/24/17 - 4:01 PM ET

Financial Analysis


AVON PRODUCTS's gross profit margin for the first quarter of its fiscal year 2017 is essentially unchanged when compared to the same period a year ago. The company has grown sales and net income during the past quarter when compared with the same quarter a year ago, however, it was unable to keep up with the growth of the average competitor within its industry. AVON PRODUCTS has weak liquidity. Currently, the Quick Ratio is 0.70 which shows a lack of ability to cover 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 increased by 17.88% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q1 FY17 Q1 FY16
Net Sales ($mil)1333.11306.5
EBITDA ($mil)66.382.2
EBIT ($mil)38.754.6
Net Income ($mil)-36.5-165.8


Balance Sheet Q1 FY17 Q1 FY16
Cash & Equiv. ($mil)560.0755.4
Total Assets ($mil)3426.23629.1
Total Debt ($mil)1895.02214.0
Equity ($mil)-370.1-450.7


Profitability Q1 FY17 Q1 FY16
Gross Profit Margin63.2762.4
EBITDA Margin4.976.29
Operating Margin2.94.18
Sales Turnover1.681.63
Return on Assets0.64-32.03
Return on Equity0.00.0
Debt Q1 FY17 Q1 FY16
Current Ratio1.341.38
Debt/Capital1.241.26
Interest Expense35.132.7
Interest Coverage1.11.67


Share Data Q1 FY17 Q1 FY16
Shares outstanding (mil)439.85436.79
Div / share0.00.0
EPS-0.1-0.36
Book value / share-0.84-1.03
Institutional Own % n/a n/a
Avg Daily Volume6426065.05591248.0

Valuation


SELL. AVON PRODUCTS's P/E ratio indicates a significant premium compared to an average of 43.00 for the Personal Products industry and a significant premium compared to the S&P 500 average of 25.02. Normally, for additional comaprison, we would look at the price-to-book ratio; however, this company's price-to-book ratio is negative making the value useless for comparisons. The price-to-sales ratio is well below both the S&P 500 average and 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
AVP 335.00 Peers 43.00   AVP 6.86 Peers 17.35

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

AVP is trading at a significant 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.

AVP 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
AVP 9.05 Peers 23.99   AVP NM Peers 1.49

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

AVP is trading at a significant discount to its peers.

 

Neutral. 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.

AVP's negative PEG ratio makes this valuation measure meaningless.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
AVP NM Peers 8.49   AVP 100.54 Peers -2.99

Neutral. 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.

AVP's P/B is negative making this valuation measure meaningless.

 

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

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

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
AVP 0.26 Peers 2.23   AVP -2.89 Peers 0.43

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.

AVP 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.

AVP significantly trails its peers on the basis of sales growth

 

 

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