GlaxoSmithKline PLC

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GSK : NYSE : Health Care
$43.42 | %
Today's Range: 43.18 - 43.52
Avg. Daily Volume: 2,996,300
09/23/16 - 4:02 PM ET

Financial Analysis


GLAXOSMITHKLINE PLC'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, underperforming the average competitor within its industry. GLAXOSMITHKLINE PLC has weak liquidity. Currently, the Quick Ratio is 0.59 which 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 92.91% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q2 FY16 Q2 FY15
Net Sales ($mil)8039.749857.37
EBITDA ($mil)0.00.0
EBIT ($mil)2045.991817.28
Net Income ($mil)-608.15943.74


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)6187.9911976.11
Total Assets ($mil)76309.6785111.38
Total Debt ($mil)25931.8127000.11
Equity ($mil)760.0910725.81


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin68.7667.17
EBITDA Margin0.00.0
Operating Margin25.4518.44
Sales Turnover0.450.41
Return on Assets-0.9617.6
Return on Equity-97.28139.73
Debt Q2 FY16 Q2 FY15
Current Ratio0.931.31
Debt/Capital0.970.72
Interest Expense221.71321.86
Interest Coverage9.235.65


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)2430.52417.0
Div / share0.50.59
EPS-0.250.38
Book value / share0.314.44
Institutional Own % n/a n/a
Avg Daily Volume3214169.03268575.0

Valuation


HOLD. 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. For additional comparison, its price-to-book ratio of 139.24 indicates a significant premium versus the S&P 500 average of 2.78 and a significant premium versus the industry average of 19.68. The price-to-sales ratio is well above the S&P 500 average, but well below the industry average. After reviewing these and other key valuation criteria, GLAXOSMITHKLINE PLC proves to trade at a premium 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
GSK NM Peers 29.09   GSK 20.43 Peers 20.79

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.

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

 

Average. 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.

GSK is trading at a valuation on par to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
GSK 0.41 Peers 14.90   GSK NA Peers 0.54

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

GSK is trading at a significant 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
GSK 139.24 Peers 19.68   GSK -104.87 Peers -21.06

Premium. A higher price-to-book ratio makes a stock less attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

GSK is trading at a significant premium to its peers.

 

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

However, GSK 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
GSK 3.06 Peers 13.29   GSK -2.03 Peers 5.63

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.

GSK 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.

GSK significantly trails its peers on the basis of sales growth

 

 

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