StarTek Inc

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SRT : NYSE : Services
$4.25 | %
Today's Range: 4.23 - 4.25
Avg. Daily Volume: 8,600
07/22/16 - 3:59 PM ET

Financial Analysis


STARTEK INC's gross profit margin for the first quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Sales and net income have grown, and although the growth in revenues has outpaced the average competitor within the industry, the net income growth has not. STARTEK INC has average liquidity. Currently, the Quick Ratio is 1.02 which shows that technically this company has the ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.

During the same period, stockholders' equity ("net worth") has decreased by 17.75% from the same quarter last year. Together, the key liquidity measurements indicate that it is relatively unlikely that the company will face financial difficulties in the near future.

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Income Statement Q1 FY16 Q1 FY15
Net Sales ($mil)78.0463.65
EBITDA ($mil)3.841.09
EBIT ($mil)0.61-1.94
Net Income ($mil)0.03-3.18


Balance Sheet Q1 FY16 Q1 FY15
Cash & Equiv. ($mil)0.836.47
Total Assets ($mil)105.83100.24
Total Debt ($mil)38.0118.95
Equity ($mil)42.7652.0


Profitability Q1 FY16 Q1 FY15
Gross Profit Margin14.8914.38
EBITDA Margin4.911.71
Operating Margin0.78-3.05
Sales Turnover2.82.5
Return on Assets-11.72-8.11
Return on Equity-29.01-15.64
Debt Q1 FY16 Q1 FY15
Current Ratio1.11.53
Debt/Capital0.470.27
Interest Expense0.360.31
Interest Coverage1.69-6.33


Share Data Q1 FY16 Q1 FY15
Shares outstanding (mil)15.7115.43
Div / share0.00.0
EPS0.0-0.21
Book value / share2.723.37
Institutional Own % n/a n/a
Avg Daily Volume9678.013751.0

Valuation


SELL. This stock’s P/E ratio is negative, making its value useless in the assessment of premium or discount valuation, only displaying that the company has negative earnings per share. To use another comparison, its price-to-book ratio of 1.60 indicates a discount versus the S&P 500 average of 2.80 and a significant discount versus the industry average of 8.44. The price-to-sales ratio is well below both the S&P 500 average and the industry average, indicating a discount. After reviewing these and other key valuation criteria, STARTEK 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
SRT NM Peers 26.28   SRT NM Peers 21.00

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.

SRT'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.

SRT'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
SRT 13.59 Peers 21.73   SRT NA Peers 2.71

Premium. A higher price-to-projected earnings ratio than its peers can signify a more expensive stock or higher future growth expectations.

SRT is trading at a significant premium 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.

Ratio not available.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
SRT 1.60 Peers 8.44   SRT -50.94 Peers 12.49

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.

SRT 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, SRT 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
SRT 0.23 Peers 5.32   SRT 18.35 Peers 6.07

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.

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

 

Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.

SRT has a sales growth rate that significantly exceeds its peers.

 

 

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