CAVM : NASDAQ : Technology
$55.42 | %
Today's Range: 53.9 - 55.76
Avg. Daily Volume: 1054400.0
12/02/16 - 4:00 PM ET

Financial Analysis


CAVIUM 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. Even though sales increased, the net income has decreased, representing a decrease to the bottom line. CAVIUM INC has strong liquidity. Currently, the Quick Ratio is 1.78 which shows the ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year, indicating deteriorating cash flow.

At the same time, stockholders' equity ("net worth") has greatly increased by 145.37% from the same quarter last year. The key liquidity measurements indicate that the company is unlikely to face financial difficulties in the near future.

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Income Statement Q3 FY16 Q3 FY15
Net Sales ($mil)168.12105.06
EBITDA ($mil)7.8716.41
EBIT ($mil)-20.336.34
Net Income ($mil)-14.374.22


Balance Sheet Q3 FY16 Q3 FY15
Cash & Equiv. ($mil)192.38130.99
Total Assets ($mil)1750.71424.7
Total Debt ($mil)769.6733.1
Equity ($mil)837.93341.49


Profitability Q3 FY16 Q3 FY15
Gross Profit Margin72.975.13
EBITDA Margin4.6715.62
Operating Margin-12.096.03
Sales Turnover0.270.97
Return on Assets-1.52-6.6
Return on Equity-3.17-8.21
Debt Q3 FY16 Q3 FY15
Current Ratio2.734.1
Debt/Capital0.480.09
Interest Expense4.270.22
Interest Coverage-4.7629.34


Share Data Q3 FY16 Q3 FY15
Shares outstanding (mil)66.5555.93
Div / share0.00.0
EPS-0.230.07
Book value / share12.596.11
Institutional Own % n/a n/a
Avg Daily Volume1083807.01528426.0

Valuation


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 4.43 indicates a significant premium versus the S&P 500 average of 2.79 and a premium versus the industry average of 4.21. The price-to-sales ratio is well above both the S&P 500 average and the industry average, indicating a premium. Upon assessment of these and other key valuation criteria, CAVIUM INC seems to be trading 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
CAVM NM Peers 30.84   CAVM 534.30 Peers 17.71

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.

CAVM'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.

CAVM 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
CAVM 21.28 Peers 20.16   CAVM NA Peers 3.19

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

CAVM is trading at a significant premium 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.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
CAVM 4.43 Peers 4.21   CAVM 11.77 Peers 21.82

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.

CAVM 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, CAVM 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
CAVM 7.76 Peers 4.50   CAVM 15.75 Peers 10.81

Premium. 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.

CAVM is trading at a significant premium to its industry.

 

Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.

CAVM has a sales growth rate that significantly exceeds its peers.

 

 

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