Office Depot Inc.

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ODP : NASDAQ : Retail Trade
$3.05 | %
Today's Range: 0.0 - 0.0
Avg. Daily Volume: 4087700.0
02/21/18 - 4:00 PM ET

Financial Analysis


OFFICE DEPOT INC's gross profit margin for the third quarter of its fiscal year 2017 has decreased when compared to the same period a year ago. Sales and net income have dropped, underperforming the average competitor within its industry. OFFICE DEPOT INC has weak liquidity. Currently, the Quick Ratio is 0.80 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 10.43% 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 Q3 FY17 Q3 FY16
Net Sales ($mil)2620.02836.0
EBITDA ($mil)168.0191.0
EBIT ($mil)131.0148.0
Net Income ($mil)93.0193.0


Balance Sheet Q3 FY17 Q3 FY16
Cash & Equiv. ($mil)788.0801.0
Total Assets ($mil)5397.05881.0
Total Debt ($mil)1063.01191.0
Equity ($mil)2042.01849.0


Profitability Q3 FY17 Q3 FY16
Gross Profit Margin25.6127.12
EBITDA Margin6.416.73
Operating Margin5.05.22
Sales Turnover1.921.88
Return on Assets5.797.88
Return on Equity12.2435.47
Debt Q3 FY17 Q3 FY16
Current Ratio1.521.46
Debt/Capital0.340.39
Interest Expense12.019.0
Interest Coverage10.927.79


Share Data Q3 FY17 Q3 FY16
Shares outstanding (mil)516.12528.38
Div / share0.030.03
EPS0.190.61
Book value / share3.963.5
Institutional Own % n/a n/a
Avg Daily Volume4316248.05356973.0

Valuation


HOLD. OFFICE DEPOT INC's P/E ratio indicates a significant discount compared to an average of 24.16 for the Specialty Retail industry and a significant discount compared to the S&P 500 average of 25.51. For additional comparison, its price-to-book ratio of 0.79 indicates a significant discount versus the S&P 500 average of 3.26 and a significant discount versus the industry average of 38.06. 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 6.62 Peers 24.16   ODP 3.47 Peers 15.50

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 6.76 Peers 21.54   ODP NM Peers 1.44

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.

 

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.

ODP's negative PEG ratio makes this valuation measure meaningless.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
ODP 0.79 Peers 38.06   ODP -60.51 Peers 12.42

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.

 

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

However, ODP 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
ODP 0.15 Peers 1.65   ODP -6.12 Peers 5.19

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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