Office Depot Inc

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ODP : NASDAQ : Services
$4.12 | %
Today's Range: 4.07 - 4.18
Avg. Daily Volume: 7005200.0
08/18/17 - 4:00 PM ET

Financial Analysis


OFFICE DEPOT INC's gross profit margin for the second quarter of its fiscal year 2017 is essentially unchanged 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 0.77 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 increased by 6.18% 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 FY17 Q2 FY16
Net Sales ($mil)2363.02583.0
EBITDA ($mil)106.0128.0
EBIT ($mil)67.079.0
Net Income ($mil)24.0210.0


Balance Sheet Q2 FY17 Q2 FY16
Cash & Equiv. ($mil)763.01118.0
Total Assets ($mil)5412.06173.0
Total Debt ($mil)1162.01462.0
Equity ($mil)1975.01860.0


Profitability Q2 FY17 Q2 FY16
Gross Profit Margin24.7125.63
EBITDA Margin4.484.95
Operating Margin2.843.06
Sales Turnover1.961.83
Return on Assets7.634.48
Return on Equity24.319.78
Debt Q2 FY17 Q2 FY16
Current Ratio1.591.68
Debt/Capital0.370.44
Interest Expense14.022.0
Interest Coverage4.793.59


Share Data Q2 FY17 Q2 FY16
Shares outstanding (mil)518.41543.93
Div / share0.030.0
EPS0.040.41
Book value / share3.813.42
Institutional Own % n/a n/a
Avg Daily Volume7071360.05421003.0

Valuation


HOLD. OFFICE DEPOT INC's P/E ratio indicates a significant discount compared to an average of 21.45 for the Specialty Retail industry and a significant discount compared to the S&P 500 average of 24.31. For additional comparison, its price-to-book ratio of 1.17 indicates a significant discount versus the S&P 500 average of 3.03 and a significant discount versus the industry average of 21.61. 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 5.00 Peers 21.45   ODP 6.28 Peers 13.40

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 8.40 Peers 18.42   ODP NM Peers 1.72

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 1.17 Peers 21.61   ODP 34.84 Peers 10.33

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 0.22 Peers 1.42   ODP -5.95 Peers 5.74

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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