Nielsen Holdings PLC

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NLSN : NYSE : Services
$52.51 -0.38 | -0.72%
Today's Range: 52.48 - 52.97
Avg. Daily Volume: 1,869,300
08/24/16 - 2:41 PM ET

Financial Analysis


NIELSEN HOLDINGS NV'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. Even though sales increased, the net income has decreased. NIELSEN HOLDINGS NV has weak liquidity. Currently, the Quick Ratio is 0.69 which shows a lack of ability to cover short-term cash needs. The liquidity decreased from the same period a year ago, despite already having weak liquidity to begin with. This would indicate deteriorating cash flow.

During the same period, stockholders' equity ("net worth") has decreased by 8.59% 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 ($mil)1596.01559.0
EBITDA ($mil)468.0446.0
EBIT ($mil)316.0300.0
Net Income ($mil)113.0114.0


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)346.0331.0
Total Assets ($mil)15718.015465.0
Total Debt ($mil)8008.07473.0
Equity ($mil)4275.04677.0


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin59.0258.43
EBITDA Margin29.3228.6
Operating Margin19.819.24
Sales Turnover0.40.4
Return on Assets3.852.77
Return on Equity14.179.17
Debt Q2 FY16 Q2 FY15
Current Ratio0.841.29
Debt/Capital0.650.62
Interest Expense83.079.0
Interest Coverage3.813.8


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)357.35366.86
Div / share0.310.28
EPS0.310.31
Book value / share11.9612.75
Institutional Own % n/a n/a
Avg Daily Volume1824140.01946159.0

Valuation


BUY. The current P/E ratio indicates a discount compared to an average of 34.30 for the Professional Services industry and a premium compared to the S&P 500 average of 25.25. To use another comparison, its price-to-book ratio of 4.47 indicates a significant premium versus the S&P 500 average of 2.83 and a significant discount versus the industry average of 7.90. 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, NIELSEN HOLDINGS NV 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
NLSN 32.60 Peers 34.30   NLSN 16.73 Peers 16.94

Average. An average P/E ratio can signify an industry neutral price for a stock and an average growth expectation.

NLSN is trading at a valuation on par with its peers.

 

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.

NLSN 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
NLSN 16.92 Peers 20.29   NLSN 0.38 Peers 1.41

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

NLSN is trading at a valuation on par with 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.

NLSN 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
NLSN 4.47 Peers 7.90   NLSN 43.85 Peers 97.82

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.

NLSN 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, NLSN 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
NLSN 3.06 Peers 3.69   NLSN 0.25 Peers 40.31

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.

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

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

NLSN significantly trails its peers on the basis of sales growth

 

 

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