Office Depot Inc

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ODP : NASDAQ : Services
$3.57 up 0.05 | 1.42%
Today's Range: 3.51 - 3.61
Avg. Daily Volume: 7,302,900
09/30/16 - 4:00 PM ET

Financial Analysis


OFFICE DEPOT INC'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 decreased, the net income has increased. OFFICE DEPOT INC has weak liquidity. Currently, the Quick Ratio is 0.95 which shows a lack of ability to cover short-term cash needs. The company's liquidity has increased from the same period last year, indicating improving cash flow.

During the same period, stockholders' equity ("net worth") has increased by 17.49% 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 ($mil)3218.03440.0
EBITDA ($mil)122.0144.0
EBIT ($mil)67.068.0
Net Income ($mil)210.0-58.0


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)1118.0867.0
Total Assets ($mil)6173.06360.0
Total Debt ($mil)1462.01536.0
Equity ($mil)1860.01583.0


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin24.9225.87
EBITDA Margin3.794.18
Operating Margin2.081.98
Sales Turnover2.262.39
Return on Assets4.48-1.05
Return on Equity14.89-4.23
Debt Q2 FY16 Q2 FY15
Current Ratio1.681.54
Debt/Capital0.440.49
Interest Expense26.023.0
Interest Coverage2.582.96


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)543.93548.14
Div / share0.00.0
EPS0.38-0.11
Book value / share3.422.89
Institutional Own % n/a n/a
Avg Daily Volume8217877.01.5784274E7

Valuation


HOLD. OFFICE DEPOT INC's P/E ratio indicates a significant discount compared to an average of 21.96 for the Specialty Retail industry and a significant discount compared to the S&P 500 average of 25.19. For additional comparison, its price-to-book ratio of 1.06 indicates a significant discount versus the S&P 500 average of 2.82 and a significant discount versus the industry average of 12.35. The price-to-sales ratio is well below both the S&P 500 average and the industry average, indicating a discount. Upon assessment of these and other key valuation criteria, OFFICE DEPOT 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
ODP 7.26 Peers 21.96   ODP 4.85 Peers 14.09

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

ODP 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.

ODP 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
ODP 8.34 Peers 19.56   ODP 0.00 Peers 1.91

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

ODP 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.

ODP 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
ODP 1.06 Peers 12.35   ODP 484.61 Peers 0.78

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.

ODP 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.

ODP 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
ODP 0.14 Peers 1.48   ODP -8.47 Peers 7.28

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.

ODP 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.

ODP significantly trails its peers on the basis of sales growth

 

 

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