The Ultimate Software Group Inc

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ULTI : NASDAQ : Technology
$191.4 | %
Today's Range: 187.68 - 193.4
Avg. Daily Volume: 260000.0
12/02/16 - 4:00 PM ET

Financial Analysis


ULTIMATE SOFTWARE GROUP INC's gross profit margin for the third quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Even though sales increased, the net income has decreased, representing a decrease to the bottom line. ULTIMATE SOFTWARE GROUP INC has very weak liquidity. Currently, the Quick Ratio is 0.41 which clearly shows a lack of ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.

At the same time, stockholders' equity ("net worth") has greatly increased by 31.30% 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 Q3 FY16 Q3 FY15
Net Sales ($mil)196.99155.32
EBITDA ($mil)15.9217.03
EBIT ($mil)9.311.61
Net Income ($mil)4.765.85


Balance Sheet Q3 FY16 Q3 FY15
Cash & Equiv. ($mil)111.11128.94
Total Assets ($mil)1070.07852.49
Total Debt ($mil)10.78.25
Equity ($mil)433.16329.88


Profitability Q3 FY16 Q3 FY15
Gross Profit Margin64.5764.77
EBITDA Margin8.0810.96
Operating Margin4.727.47
Sales Turnover0.690.68
Return on Assets2.472.99
Return on Equity6.127.73
Debt Q3 FY16 Q3 FY15
Current Ratio1.141.22
Debt/Capital0.020.02
Interest Expense0.00.0
Interest Coverage0.00.0


Share Data Q3 FY16 Q3 FY15
Shares outstanding (mil)29.028.63
Div / share0.00.0
EPS0.160.2
Book value / share14.9411.52
Institutional Own % n/a n/a
Avg Daily Volume236885.0228799.0

Valuation


HOLD. ULTIMATE SOFTWARE GROUP INC's P/E ratio indicates a significant premium compared to an average of 50.33 for the Software industry and a significant premium compared to the S&P 500 average of 25.16. For additional comparison, its price-to-book ratio of 14.11 indicates a significant premium versus the S&P 500 average of 2.79 and a significant premium versus the industry average of 7.91. The price-to-sales ratio is well above both the S&P 500 average and the industry average, indicating a premium. Upon assessment of these and other key valuation criteria, ULTIMATE SOFTWARE GROUP INC proves to trade at a premium 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
ULTI 239.56 Peers 50.33   ULTI 40.61 Peers 21.89

Premium. A higher P/E ratio than its peers can signify a more expensive stock or higher growth expectations.

ULTI is trading at a significant premium to its peers.

 

Premium. 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.

ULTI is trading at a significant premium to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
ULTI 51.61 Peers 29.47   ULTI 0.72 Peers 0.79

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

ULTI is trading at a significant premium to its peers.

 

Average. 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.

ULTI trades at a valuation on par to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
ULTI 14.11 Peers 7.91   ULTI 2.32 Peers 25.88

Premium. A higher price-to-book ratio makes a stock less attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

ULTI is trading at a significant premium to its peers.

 

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

However, ULTI 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
ULTI 8.25 Peers 5.76   ULTI 27.19 Peers 4.98

Premium. 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.

ULTI is trading at a significant premium to its industry.

 

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

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

 

 

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