E*TRADE Financial Corp

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ETFC : NASDAQ : Financial
$26.05 | %
Today's Range: 25.59 - 26.13
Avg. Daily Volume: 2,780,700
08/26/16 - 4:00 PM ET

Financial Analysis


E TRADE FINANCIAL CORP'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 increased, the net income has decreased.

At the same time, stockholders' equity ("net worth") has remained virtually unchanged only increasing by 1.24% from the same quarter last year.

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Income Statement Q2 FY16 Q2 FY15
Net Sales ($mil)496.0488.0
EBITDA ($mil)261.0202.0
EBIT ($mil)236.0177.0
Net Income ($mil)133.0292.0


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)4214.022831.0
Total Assets ($mil)49202.047115.0
Total Debt ($mil)1402.05949.0
Equity ($mil)5785.05714.0


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin52.6241.39
EBITDA Margin52.6241.39
Operating Margin47.5836.27
Sales Turnover0.040.04
Return on Assets0.450.97
Return on Equity3.838.03
Debt Q2 FY16 Q2 FY15
Current Ratio0.00.0
Debt/Capital0.20.51
Interest Expense19.057.0
Interest Coverage12.423.11


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)273.68290.24
Div / share0.00.0
EPS0.480.99
Book value / share21.1419.69
Institutional Own % n/a n/a
Avg Daily Volume2772414.03488323.0

Valuation


BUY. The current P/E ratio indicates a significant premium compared to an average of 19.89 for the Capital Markets industry and a premium compared to the S&P 500 average of 25.13. Conducting a second comparison, its price-to-book ratio of 1.21 indicates a significant discount versus the S&P 500 average of 2.82 and a discount versus the industry average of 1.72. The current price-to-sales ratio is well above the S&P 500 average, but below the industry average.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
ETFC 32.71 Peers 19.89   ETFC 9.41 Peers 12.45

Premium. A higher P/E ratio than its peers can signify a more expensive stock or higher growth expectations.

ETFC is trading at a significant premium to its peers.

 

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.

ETFC is trading at a 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
ETFC 14.75 Peers 17.80   ETFC 0.38 Peers 1.40

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

ETFC is trading at a discount to its peers.

 

Discount. 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.

ETFC trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
ETFC 1.21 Peers 1.72   ETFC -50.00 Peers -30.44

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.

ETFC 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, ETFC 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
ETFC 3.62 Peers 3.86   ETFC -2.87 Peers -3.40

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.

ETFC is trading at a valuation on par with its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

ETFC significantly trails its peers on the basis of sales growth

 

 

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