BroadSoft Inc.
Find Ratings ReportsBROADSOFT INC's gross profit margin for the third quarter of its fiscal year 2017 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. BROADSOFT INC is extremely liquid. Currently, the Quick Ratio is 2.48 which clearly shows the ability to cover any short-term cash needs. The company's liquidity has decreased from the same period last year, indicating deteriorating cash flow.
During the same period, stockholders' equity ("net worth") has increased by 22.84% 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 FY17 | Q3 FY16 |
|---|---|---|
| Net Sales ($mil) | 91.47 | 84.12 |
| EBITDA ($mil) | 6.5 | 7.04 |
| EBIT ($mil) | 0.57 | 1.57 |
| Net Income ($mil) | -2.67 | -0.61 |
| Balance Sheet | Q3 FY17 | Q3 FY16 |
|---|---|---|
| Cash & Equiv. ($mil) | 371.07 | 249.4 |
| Total Assets ($mil) | 714.17 | 627.16 |
| Total Debt ($mil) | 211.13 | 197.76 |
| Equity ($mil) | 355.22 | 289.17 |
| Profitability | Q3 FY17 | Q3 FY16 |
|---|---|---|
| Gross Profit Margin | 77.31 | 78.27 |
| EBITDA Margin | 7.1 | 8.36 |
| Operating Margin | 0.62 | 1.86 |
| Sales Turnover | 0.51 | 0.52 |
| Return on Assets | -1.45 | 1.05 |
| Return on Equity | -2.91 | 2.28 |
| Debt | Q3 FY17 | Q3 FY16 |
|---|---|---|
| Current Ratio | 2.64 | 2.88 |
| Debt/Capital | 0.37 | 0.41 |
| Interest Expense | 4.26 | 3.96 |
| Interest Coverage | 0.13 | 0.4 |
| Share Data | Q3 FY17 | Q3 FY16 |
|---|---|---|
| Shares outstanding (mil) | 31.52 | 30.07 |
| Div / share | 0.0 | 0.0 |
| EPS | -0.09 | -0.02 |
| Book value / share | 11.27 | 9.62 |
| Institutional Own % | n/a | n/a |
| Avg Daily Volume | 1069671.0 | 879911.0 |
HOLD. This stock’s P/E ratio is negative, making its value useless in the assessment of premium or discount valuation, only displaying that the company has negative earnings per share. Conducting a second comparison, its price-to-book ratio of 4.87 indicates a premium versus the S&P 500 average of 3.37 and a significant discount versus the industry average of 12.86. The price-to-sales ratio is well above the S&P 500 average, but well below the industry average. After reviewing these and other key valuation criteria, BROADSOFT INC proves to trade at a discount to investment alternatives within the industry.
| Price/Earnings |
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Price/Cash Flow |
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|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| BSFT NM | Peers 620.71 | BSFT 28.67 | Peers 24.30 | |||||||||||||||||||||
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Neutral. The absence of a valid P/E ratio happens when a stock can not be valued on the basis of a negative stream of earnings. BSFT's P/E is negative making this valuation measure meaningless. |
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. BSFT is trading at a premium to its peers. |
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| Price/Projected Earnings |
|
Price to Earnings/Growth |
|
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| BSFT 20.91 | Peers 36.61 | BSFT NA | Peers 2.80 | |||||||||||||||||||||
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Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations. BSFT 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. Ratio not available. |
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| Price/Book |
|
Earnings Growth |
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| BSFT 4.87 | Peers 12.86 | BSFT -259.09 | Peers -6.66 | |||||||||||||||||||||
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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. BSFT 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, BSFT is expected to significantly trail its peers on the basis of its earnings growth rate. |
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| Price/Sales |
|
Sales Growth |
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| BSFT 4.78 | Peers 7.61 | BSFT 10.13 | Peers 16.53 | |||||||||||||||||||||
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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. BSFT 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. BSFT significantly trails its peers on the basis of sales growth |
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