The Ultimate Software Group Inc

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ULTI : NASDAQ : Technology
$196.97 up 1.1 | 0.56%
Today's Range: 194.77 - 197.39
Avg. Daily Volume: 319900.0
08/21/17 - 2:35 PM ET

Financial Analysis


ULTIMATE SOFTWARE GROUP 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. Even though sales increased, the net income has decreased. ULTIMATE SOFTWARE GROUP INC has very weak liquidity. Currently, the Quick Ratio is 0.38 which clearly 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.

At the same time, stockholders' equity ("net worth") has greatly increased by 34.35% 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 Q2 FY17 Q2 FY16
Net Sales ($mil)224.69186.54
EBITDA ($mil)15.3315.11
EBIT ($mil)6.958.64
Net Income ($mil)5.06.12


Balance Sheet Q2 FY17 Q2 FY16
Cash & Equiv. ($mil)110.9697.99
Total Assets ($mil)1242.211518.03
Total Debt ($mil)10.019.66
Equity ($mil)489.66364.45


Profitability Q2 FY17 Q2 FY16
Gross Profit Margin65.8964.58
EBITDA Margin6.828.1
Operating Margin3.094.63
Sales Turnover0.690.46
Return on Assets2.41.81
Return on Equity6.17.57
Debt Q2 FY17 Q2 FY16
Current Ratio1.151.08
Debt/Capital0.020.03
Interest Expense0.00.0
Interest Coverage0.00.0


Share Data Q2 FY17 Q2 FY16
Shares outstanding (mil)29.8228.93
Div / share0.00.0
EPS0.160.2
Book value / share16.4212.6
Institutional Own % n/a n/a
Avg Daily Volume316878.0289955.0

Valuation


BUY. ULTIMATE SOFTWARE GROUP INC's P/E ratio indicates a significant premium compared to an average of 59.76 for the Software industry and a significant premium compared to the S&P 500 average of 24.23. For additional comparison, its price-to-book ratio of 11.65 indicates a significant premium versus the S&P 500 average of 3.02 and a significant premium versus the industry average of 8.60. The current price-to-sales ratio is well above the S&P 500 average, but below the industry average. After reviewing 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 195.18 Peers 59.76   ULTI 28.88 Peers 37.05

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.

 

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.

ULTI is trading at a 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
ULTI 43.87 Peers 34.04   ULTI 0.76 Peers 1.12

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.

 

Discount. 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 significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
ULTI 11.65 Peers 8.60   ULTI 6.52 Peers 89.33

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 6.63 Peers 6.93   ULTI 23.00 Peers 12.04

Average. 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 valuation on par with its industry on this measurement.

 

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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