Kennametal Inc

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KMT : NYSE : Industrial Goods
$24.26 | %
Today's Range: 23.75 - 24.34
Avg. Daily Volume: 1,181,000
07/22/16 - 4:03 PM ET

Financial Analysis


KENNAMETAL 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. KENNAMETAL INC has average liquidity. Currently, the Quick Ratio is 1.19 which shows that technically this company has the ability to cover short-term cash needs. The company's liquidity has increased from the same period last year.

During the same period, stockholders' equity ("net worth") has decreased by 16.55% from the same quarter last year. Together, the key liquidity measurements indicate that it is relatively unlikely that the company will face financial difficulties in the near future.

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Income Statement Q3 FY16 Q3 FY15
Net Sales ($mil)497.84638.97
EBITDA ($mil)66.0788.38
EBIT ($mil)38.7856.04
Net Income ($mil)16.0-46.23


Balance Sheet Q3 FY16 Q3 FY15
Cash & Equiv. ($mil)136.56146.18
Total Assets ($mil)2491.943002.05
Total Debt ($mil)703.89903.76
Equity ($mil)1144.161371.18


Profitability Q3 FY16 Q3 FY15
Gross Profit Margin36.4935.33
EBITDA Margin13.2713.83
Operating Margin7.798.77
Sales Turnover0.890.93
Return on Assets-5.55-11.64
Return on Equity-12.08-25.49
Debt Q3 FY16 Q3 FY15
Current Ratio2.612.56
Debt/Capital0.380.4
Interest Expense7.117.76
Interest Coverage5.457.22


Share Data Q3 FY16 Q3 FY15
Shares outstanding (mil)79.6879.26
Div / share0.20.18
EPS0.2-0.58
Book value / share14.3617.3
Institutional Own % n/a n/a
Avg Daily Volume1158894.01567734.0

Valuation


SELL. 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. To use another comparison, its price-to-book ratio of 1.60 indicates a discount versus the S&P 500 average of 2.80 and a significant discount versus the industry average of 3.76. 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, KENNAMETAL INC 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
KMT NM Peers 24.59   KMT 6.59 Peers 16.42

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.

KMT'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.

KMT 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
KMT 18.37 Peers 21.53   KMT NA Peers 5.04

Average. An average price-to-projected earnings ratio can signify an industry neutral stock price and average future growth expectations.

KMT is trading at a valuation on par with 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
KMT 1.60 Peers 3.76   KMT 60.55 Peers -26.90

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.

KMT 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.

KMT 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
KMT 0.83 Peers 1.63   KMT -20.38 Peers -5.47

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.

KMT 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.

KMT significantly trails its peers on the basis of sales growth

 

 

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