DragonWave Inc

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DRWI : NASDAQ : Technology
$2.8 | %
Today's Range: 2.75 - 2.9
Avg. Daily Volume: 699400.0
12/09/16 - 4:00 PM ET

Financial Analysis


DRAGONWAVE INC's gross profit margin for the second quarter of its fiscal year 2016 has significantly increased when compared to the same period a year ago. Even though sales decreased, the net income has increased. DRAGONWAVE INC has very weak liquidity. Currently, the Quick Ratio is 0.48 which clearly shows a lack of 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 significantly decreased by 101.98% from the same quarter last year. The key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the near future.

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Income Statement Q2 FY16 Q2 FY15
Net Sales ($mil)13.2326.92
EBITDA ($mil)-2.61-6.05
EBIT ($mil)-3.16-6.69
Net Income ($mil)-3.94-20.97


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)7.4713.08
Total Assets ($mil)50.0388.33
Total Debt ($mil)17.0933.16
Equity ($mil)-0.3517.41


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin29.1514.8
EBITDA Margin-19.69-22.46
Operating Margin-23.87-24.87
Sales Turnover1.181.63
Return on Assets-46.8-37.3
Return on Equity0.0-189.3
Debt Q2 FY16 Q2 FY15
Current Ratio1.041.24
Debt/Capital1.020.66
Interest Expense0.390.62
Interest Coverage-8.16-10.78


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)5.493.02
Div / share0.00.0
EPS-0.96-7.0
Book value / share-0.065.77
Institutional Own % n/a n/a
Avg Daily Volume686107.078193.0

Valuation


SELL. 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. Along with this, the price-to-book ratio is also meaningless due to a negative book value for the company, making any comparisons useless. 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
DRWI NM Peers 32.49   DRWI 4.57 Peers 14.47

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.

DRWI's P/E is negative making this valuation measure meaningless.

 

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.

DRWI 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
DRWI NA Peers 20.78   DRWI NA Peers 1.01

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

Ratio not available.

 

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
DRWI NM Peers 3.25   DRWI 35.83 Peers 76.36

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.

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

 

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

However, DRWI 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
DRWI 0.25 Peers 2.91   DRWI -59.25 Peers 19.75

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.

DRWI 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.

DRWI significantly trails its peers on the basis of sales growth

 

 

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