FirstEnergy Corp

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FE : NYSE : Utilities
$33.08 -0.09 | -0.27%
Today's Range: 32.90 - 33.50
Avg. Daily Volume: 3,512,800
09/30/16 - 4:03 PM ET

Financial Analysis


FIRSTENERGY CORP's gross profit margin for the second quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Sales and net income have dropped, although the growth in net income underperformed the average competitor within the industry, the revenue growth did not. FIRSTENERGY CORP has very weak liquidity. Currently, the Quick Ratio is 0.25 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.

During the same period, stockholders' equity ("net worth") has decreased by 8.96% 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 ($mil)3401.03465.0
EBITDA ($mil)927.0947.0
EBIT ($mil)530.0566.0
Net Income ($mil)-1089.0187.0


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)199.094.0
Total Assets ($mil)51401.053005.0
Total Debt ($mil)22600.022770.0
Equity ($mil)11407.012530.0


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin27.2627.33
EBITDA Margin27.2527.33
Operating Margin15.5816.33
Sales Turnover0.290.28
Return on Assets-1.150.82
Return on Equity-5.183.47
Debt Q2 FY16 Q2 FY15
Current Ratio0.460.61
Debt/Capital0.660.65
Interest Expense287.0282.0
Interest Coverage1.852.01


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)425.2422.45
Div / share0.360.36
EPS-2.560.44
Book value / share26.8329.66
Institutional Own % n/a n/a
Avg Daily Volume3494697.04368716.0

Valuation


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 1.30 indicates a significant discount versus the S&P 500 average of 2.82 and a discount versus the industry average of 1.84. 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, FIRSTENERGY CORP 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
FE NM Peers 25.94   FE 3.78 Peers 7.68

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.

FE'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.

FE 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
FE 13.96 Peers 17.77   FE NA Peers 5.75

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

FE is trading at a discount 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
FE 1.30 Peers 1.84   FE -234.95 Peers -4.40

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.

FE 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, FE 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
FE 0.99 Peers 2.33   FE 1.39 Peers -4.83

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.

FE is trading at a significant discount to its industry on this measurement.

 

Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.

FE has a sales growth rate that significantly exceeds its peers.

 

 

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