HMS Holdings Corp

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HMSY : NASDAQ : Services
$17.84 -0.07 | -0.39%
Today's Range: 17.75 - 17.965
Avg. Daily Volume: 399200.0
03/23/17 - 2:56 PM ET

Financial Analysis


HMS HOLDINGS CORP'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, representing an increase to the bottom line. HMS HOLDINGS CORP is extremely liquid. Currently, the Quick Ratio is 3.91 which clearly shows the ability to cover any short-term cash needs. HMSY managed to increase the liquidity from the same period a year ago, despite already having very strong liquidity to begin with. This would indicate improved cash flow.

During the same period, stockholders' equity ("net worth") has increased by 6.08% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is very unlikely to face financial difficulties in the near future.

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Income Statement Q4 FY16 Q4 FY15
Net Sales ($mil)128.09128.51
EBITDA ($mil)29.8326.97
EBIT ($mil)18.7614.82
Net Income ($mil)11.08.73


Balance Sheet Q4 FY16 Q4 FY15
Cash & Equiv. ($mil)176.0145.61
Total Assets ($mil)882.76858.06
Total Debt ($mil)197.8197.85
Equity ($mil)556.61524.7


Profitability Q4 FY16 Q4 FY15
Gross Profit Margin43.338.56
EBITDA Margin23.2820.98
Operating Margin14.6511.53
Sales Turnover0.560.55
Return on Assets4.262.85
Return on Equity6.764.67
Debt Q4 FY16 Q4 FY15
Current Ratio4.083.8
Debt/Capital0.260.27
Interest Expense2.211.97
Interest Coverage8.57.52


Share Data Q4 FY16 Q4 FY15
Shares outstanding (mil)83.5583.99
Div / share0.00.0
EPS0.130.1
Book value / share6.666.25
Institutional Own % n/a n/a
Avg Daily Volume441968.0611203.0

Valuation


BUY. The current P/E ratio indicates a significant discount compared to an average of 217.53 for the Health Care Technology industry and a significant premium compared to the S&P 500 average of 26.73. To use another comparison, its price-to-book ratio of 2.75 indicates valuation on par with the S&P 500 average of 2.98 and a significant discount versus the industry average of 5.38. The price-to-sales ratio is well above the S&P 500 average, but well below the industry average. Upon assessment of these and other key valuation criteria, HMS HOLDINGS 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
HMSY 41.70 Peers 217.53   HMSY 17.30 Peers 23.99

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

HMSY is trading at a significant discount 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.

HMSY 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
HMSY 20.05 Peers 34.85   HMSY 0.48 Peers 0.88

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

HMSY 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.

HMSY 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
HMSY 2.75 Peers 5.38   HMSY 57.14 Peers -51.96

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.

HMSY is trading at a significant discount to its peers.

 

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

HMSY is expected to have an earnings growth rate that significantly exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
HMSY 3.09 Peers 5.18   HMSY 4.59 Peers 18.99

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.

HMSY 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.

HMSY significantly trails its peers on the basis of sales growth

 

 

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