Sears Holdings Corp

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SHLD : NYSE : Services
$8.93 -0.67 | -7.0%
Today's Range: 8.88 - 9.8
Avg. Daily Volume: 1350700.0
07/21/17 - 3:22 PM ET

Financial Analysis


SEARS HOLDINGS CORP's gross profit margin for the first quarter of its fiscal year 2017 is essentially unchanged when compared to the same period a year ago. Even though sales decreased, the net income has increased. SEARS HOLDINGS CORP has very weak liquidity. Currently, the Quick Ratio is 0.15 which clearly shows a lack of ability to cover short-term cash needs. The company's liquidity decreased from the same period a year ago, despite already having very weak liquidity to begin with. This would indicate deteriorating cash flow.

At the same time, stockholders' equity ("net worth") has significantly decreased by 49.00% from the same quarter last year. The key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the near future.

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Income Statement Q1 FY17 Q1 FY16
Net Sales ($mil)4301.05394.0
EBITDA ($mil)-352.0-334.0
EBIT ($mil)-439.0-429.0
Net Income ($mil)244.0-471.0


Balance Sheet Q1 FY17 Q1 FY16
Cash & Equiv. ($mil)264.0286.0
Total Assets ($mil)9071.011175.0
Total Debt ($mil)4464.03922.0
Equity ($mil)-3527.0-2367.0


Profitability Q1 FY17 Q1 FY16
Gross Profit Margin21.6221.82
EBITDA Margin-8.18-6.19
Operating Margin-10.21-7.95
Sales Turnover2.322.21
Return on Assets-16.6-11.6
Return on Equity0.00.0
Debt Q1 FY17 Q1 FY16
Current Ratio1.031.33
Debt/Capital4.762.52
Interest Expense128.085.0
Interest Coverage-3.43-5.05


Share Data Q1 FY17 Q1 FY16
Shares outstanding (mil)107.3106.8
Div / share0.00.0
EPS2.28-4.41
Book value / share-32.87-22.16
Institutional Own % n/a n/a
Avg Daily Volume1356381.01935601.0

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. Along with this, the price-to-book ratio is also meaningless due to a negative book value for the company, making any comparisons useless. The price-to-sales ratio is well below both the S&P 500 average and the industry average, indicating a discount.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
SHLD NM Peers 15.38   SHLD NM Peers 7.53

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.

SHLD's P/E is negative making this valuation measure meaningless.

 

Neutral. 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.

SHLD's P/CF is negative making the measure meaningless.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
SHLD NM Peers 13.99   SHLD NA Peers 3.70

Neutral. The absence of a valid price-to-projected earnings ratio happens when a stock can not be valued on the basis of a negative expected future earnings.

SHLD's ratio is negative making this valuation measure meaningless.

 

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
SHLD NM Peers 3.44   SHLD -14.75 Peers 9.75

Neutral. 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.

SHLD's P/B is negative making this valuation measure meaningless.

 

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

However, SHLD 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
SHLD 0.04 Peers 0.62   SHLD -14.66 Peers 2.30

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.

SHLD 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.

SHLD significantly trails its peers on the basis of sales growth

 

 

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