FalconStor Software Inc

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FALC : NASDAQ : Technology
$0.4478 -0.0122 | -2.65%
Today's Range: 0.44 - 0.46
Avg. Daily Volume: 102500.0
01/20/17 - 4:00 PM ET

Financial Analysis


FALCONSTOR SOFTWARE INC's gross profit margin for the third quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Even though sales decreased, the net income has increased. FALCONSTOR SOFTWARE INC has very weak liquidity. Currently, the Quick Ratio is 0.46 which clearly shows a lack of ability to cover short-term cash needs. The liquidity decreased from the same period a year ago, despite already having weak liquidity to begin with. This would indicate deteriorating cash flow.

At the same time, stockholders' equity ("net worth") has significantly decreased by 318.51% 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 Q3 FY16 Q3 FY15
Net Sales ($mil)7.339.68
EBITDA ($mil)-1.51-2.01
EBIT ($mil)-1.8-2.46
Net Income ($mil)-1.98-2.58


Balance Sheet Q3 FY16 Q3 FY15
Cash & Equiv. ($mil)6.1416.07
Total Assets ($mil)18.6131.74
Total Debt ($mil)0.00.0
Equity ($mil)-11.8-2.82


Profitability Q3 FY16 Q3 FY15
Gross Profit Margin75.8879.61
EBITDA Margin-20.56-20.71
Operating Margin-24.58-25.38
Sales Turnover1.731.61
Return on Assets-63.14-7.86
Return on Equity0.00.0
Debt Q3 FY16 Q3 FY15
Current Ratio0.550.95
Debt/Capital0.00.0
Interest Expense0.00.0
Interest Coverage0.00.0


Share Data Q3 FY16 Q3 FY15
Shares outstanding (mil)43.5641.18
Div / share0.00.0
EPS-0.05-0.07
Book value / share-0.27-0.07
Institutional Own % n/a n/a
Avg Daily Volume107982.056776.0

Valuation


SELL. 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. 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
FALC NM Peers 50.22   FALC NM Peers 22.87

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.

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

 

Neutral. 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.

FALC's P/CF is negative making the measure meaningless.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
FALC NA Peers 50.61   FALC NA Peers 0.80

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
FALC NM Peers 7.84   FALC -210.00 Peers 25.26

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.

FALC'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, FALC 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
FALC 0.68 Peers 5.84   FALC -36.78 Peers 5.17

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.

FALC 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.

FALC significantly trails its peers on the basis of sales growth

 

 

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