CAVM : NASDAQ : Technology
$66.5 | %
Today's Range: 65.78 - 67.19
Avg. Daily Volume: 986500.0
09/22/17 - 4:00 PM ET

Financial Analysis


CAVIUM INC's gross profit margin for the second 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. CAVIUM INC has strong liquidity. Currently, the Quick Ratio is 1.96 which shows the ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.

At the same time, stockholders' equity ("net worth") has greatly increased by 94.11% 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 Q2 FY17 Q2 FY16
Net Sales ($mil)242.09107.16
EBITDA ($mil)46.1811.24
EBIT ($mil)-3.27-0.46
Net Income ($mil)-11.07-7.41


Balance Sheet Q2 FY17 Q2 FY16
Cash & Equiv. ($mil)127.06140.42
Total Assets ($mil)1535.13460.28
Total Debt ($mil)637.621.56
Equity ($mil)730.52376.33


Profitability Q2 FY17 Q2 FY16
Gross Profit Margin73.9177.79
EBITDA Margin19.0710.48
Operating Margin-1.35-0.43
Sales Turnover0.560.9
Return on Assets-12.86-1.75
Return on Equity-27.04-2.14
Debt Q2 FY17 Q2 FY16
Current Ratio2.713.98
Debt/Capital0.470.05
Interest Expense6.060.19
Interest Coverage-0.54-2.5


Share Data Q2 FY17 Q2 FY16
Shares outstanding (mil)68.4257.66
Div / share0.00.0
EPS-0.16-0.13
Book value / share10.686.53
Institutional Own % n/a n/a
Avg Daily Volume1047777.0794359.0

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 6.00 indicates a significant premium versus the S&P 500 average of 3.10 and a premium versus the industry average of 5.49. The current price-to-sales ratio is well above the S&P 500 average, but below the industry average. After reviewing these and other key valuation criteria, CAVIUM INC proves to trade 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 46.90   CAVM 51.77 Peers 18.33

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 18.03 Peers 21.72   CAVM NA Peers 1.12

Average. An average price-to-projected earnings ratio can signify an industry neutral stock price and average future growth expectations.

CAVM is trading at a valuation on par with 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 6.00 Peers 5.49   CAVM -1873.33 Peers 122.55

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 5.06 Peers 5.24   CAVM 108.63 Peers 25.22

Average. 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 valuation on par with its industry on this measurement.

 

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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