Edgewater Technology Inc

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EDGW : NASDAQ : Technology
$8.75 | %
Today's Range: 6.97 - 8.75
Avg. Daily Volume: 11,100
07/22/16 - 3:23 PM ET

Financial Analysis


EDGEWATER TECHNOLOGY INC's gross profit margin for the first quarter of its fiscal year 2016 has increased when compared to the same period a year ago. The company managed to grow both sales and net income at a faster pace than the average competitor in its industry this quarter as compared to the same quarter a year ago. EDGEWATER TECHNOLOGY INC has strong liquidity. Currently, the Quick Ratio is 1.63 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.

During the same period, stockholders' equity ("net worth") has remained unchanged 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 Q1 FY16 Q1 FY15
Net Sales ($mil)31.926.58
EBITDA ($mil)0.91-0.57
EBIT ($mil)-0.14-0.84
Net Income ($mil)-0.76-0.94


Balance Sheet Q1 FY16 Q1 FY15
Cash & Equiv. ($mil)7.9718.92
Total Assets ($mil)105.8996.49
Total Debt ($mil)5.00.0
Equity ($mil)74.4774.65


Profitability Q1 FY16 Q1 FY15
Gross Profit Margin33.8428.97
EBITDA Margin2.84-2.13
Operating Margin-0.44-3.18
Sales Turnover1.151.16
Return on Assets-3.662.5
Return on Equity-5.213.23
Debt Q1 FY16 Q1 FY15
Current Ratio1.732.43
Debt/Capital0.060.0
Interest Expense0.00.0
Interest Coverage0.00.0


Share Data Q1 FY16 Q1 FY15
Shares outstanding (mil)12.0911.58
Div / share0.00.0
EPS-0.06-0.08
Book value / share6.166.45
Institutional Own % n/a n/a
Avg Daily Volume11154.020313.0

Valuation


BUY. 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. To use another comparison, its price-to-book ratio of 1.41 indicates a discount versus the S&P 500 average of 2.81 and a significant discount versus the industry average of 8.25. The price-to-sales ratio is well below both the S&P 500 average and the industry average, indicating a discount. After reviewing these and other key valuation criteria, EDGEWATER TECHNOLOGY INC proves to trade at a discount 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
EDGW NM Peers 27.40   EDGW 60.19 Peers 20.12

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.

EDGW'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.

EDGW 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
EDGW 20.62 Peers 21.67   EDGW NA Peers 2.70

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

EDGW 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
EDGW 1.41 Peers 8.25   EDGW -288.88 Peers 23.94

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.

EDGW 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, EDGW 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
EDGW 0.86 Peers 5.30   EDGW 8.99 Peers 22.71

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.

EDGW 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.

EDGW significantly trails its peers on the basis of sales growth

 

 

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