Cavium Inc.

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CAVM : NASDAQ : Electronic Technology
$85.3 -1.65 | -1.9%
Today's Range: 84.49 - 86.95
Avg. Daily Volume: 1046400.0
03/19/18 - 4:00 PM ET

Financial Analysis

CAVIUM INC's gross profit margin for the fourth quarter of its fiscal year 2017 has significantly decreased when compared to the same period a year ago. Sales and net income have grown, and although the growth in revenues has outpaced the average competitor within the industry, the net income growth has not. CAVIUM INC is extremely liquid. Currently, the Quick Ratio is 2.13 which clearly shows the ability to cover any short-term cash needs. CAVM managed to increase the liquidity from the same period a year ago, despite already having very strong liquidity to begin with. This would indicate improved cash flow.

At the same time, stockholders' equity ("net worth") has remained virtually unchanged only increasing by 4.92% 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 Q4 FY17 Q4 FY16
Net Sales ($mil)260.36226.15
EBITDA ($mil)0.044.1
EBIT ($mil)6.04-3.85
Net Income ($mil)-1.05-121.6

Balance Sheet Q4 FY17 Q4 FY16
Cash & Equiv. ($mil)140.5221.44
Total Assets ($mil)1589.331650.53
Total Debt ($mil)643.04732.69
Equity ($mil)778.35741.84

Profitability Q4 FY17 Q4 FY16
Gross Profit Margin53.9473.93
EBITDA Margin0.019.5
Operating Margin2.32-1.7
Sales Turnover0.620.37
Return on Assets-4.33-8.91
Return on Equity-8.84-19.84
Debt Q4 FY17 Q4 FY16
Current Ratio2.82.91
Interest Expense6.478.07
Interest Coverage0.93-0.48

Share Data Q4 FY17 Q4 FY16
Shares outstanding (mil)68.8267.18
Div / share0.00.0
Book value / share11.3111.04
Institutional Own % n/a n/a
Avg Daily Volume1084714.01511899.0


HOLD. The current P/E ratio is negative, which has no meaningful value in the assessment of premium or discount valuation, it simply displays that the company has negative earnings. Conducting a second comparison, its price-to-book ratio of 7.67 indicates a significant premium versus the S&P 500 average of 3.28 and a premium versus the industry average of 7.05. 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.

1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
CAVM NM Peers 34.78   CAVM NA Peers 21.88

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.


Neutral. The P/CF ratio is the stock’s price divided by the sum of the company's cash flow from operations. It is useful for comparing companies with different capital requirements or financing structures.

Ratio not available.

1 2 3 4 5
premium   discount
  Price to
1 2 3 4 5
premium   discount
CAVM 19.67 Peers 21.80   CAVM NA Peers 0.85

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 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.

1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
CAVM 7.67 Peers 7.05   CAVM 54.67 Peers 171.10

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.

1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
CAVM 6.07 Peers 6.18   CAVM 63.10 Peers 22.15

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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