GlaxoSmithKline PLC

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GSK : NYSE : Health Care
$42.53 -0.2 | -0.47%
Today's Range: 42.49 - 42.76
Avg. Daily Volume: 3282900.0
03/30/17 - 1:26 PM ET

Financial Analysis


GLAXOSMITHKLINE PLC's gross profit margin for the fourth quarter of its fiscal year 2016 has increased when compared to the same period a year ago. Even though sales decreased, the net income has increased. 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 81.61% 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 Q4 FY16 Q4 FY15
Net Sales ($mil)8107.68742.15
EBITDA ($mil)0.00.0
EBIT ($mil)1971.451431.34
Net Income ($mil)272.65-846.72


Balance Sheet Q4 FY16 Q4 FY15
Cash & Equiv. ($mil)6151.238707.51
Total Assets ($mil)72888.2378811.47
Total Debt ($mil)23181.2224525.55
Equity ($mil)1386.687541.1


Profitability Q4 FY16 Q4 FY15
Gross Profit Margin69.4363.65
EBITDA Margin0.00.0
Operating Margin24.3216.37
Sales Turnover0.480.45
Return on Assets1.5415.75
Return on Equity81.13164.68
Debt Q4 FY16 Q4 FY15
Current Ratio0.881.24
Debt/Capital0.940.76
Interest Expense201.29272.8
Interest Coverage9.795.25


Share Data Q4 FY16 Q4 FY15
Shares outstanding (mil)2434.02420.0
Div / share0.460.55
EPS0.11-0.35
Book value / share0.573.12
Institutional Own % n/a n/a
Avg Daily Volume3297727.03842543.0

Valuation


HOLD. GLAXOSMITHKLINE PLC's P/E ratio indicates a significant premium compared to an average of 45.92 for the Pharmaceuticals industry and a significant premium compared to the S&P 500 average of 26.33. For additional comparison, its price-to-book ratio of 74.27 indicates a significant premium versus the S&P 500 average of 2.93 and a significant premium versus the industry average of 12.52. 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 91.98 Peers 45.92   GSK 12.85 Peers 18.88

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

GSK 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.

GSK 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
GSK 0.37 Peers 14.67   GSK 0.00 Peers 1.21

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.

 

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.

GSK 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
GSK 74.27 Peers 12.52   GSK -91.00 Peers -2.47

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 2.95 Peers 14.79   GSK -2.42 Peers 4.55

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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