74SOFTWARE SA (74SW.PA) Stock Fundamental Analysis
Europe - Euronext Paris - EPA:74SW - FR0011040500 - Common Stock
37.6 EUR
+0.2 (+0.53%)
We assign a fundamental rating of 5 out of 10 to 74SW. 74SW was compared to 114 industry peers in the Software industry. While 74SW is still in line with the averages on profitability rating, there are concerns on its financial health. 74SW is evaluated to be cheap and growing strongly. This does not happen too often!
1. Profitability
1.1 Basic Checks
- 74SW had positive earnings in the past year.
- 74SW had a positive operating cash flow in the past year.
- 74SW had positive earnings in 4 of the past 5 years.
- 74SW had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- Looking at the Return On Assets, with a value of 3.47%, 74SW is in line with its industry, outperforming 49.12% of the companies in the same industry.
- 74SW has a Return On Equity (8.15%) which is in line with its industry peers.
- With a decent Return On Invested Capital value of 8.61%, 74SW is doing good in the industry, outperforming 63.16% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.47% | ||
| ROE | 8.15% | ||
| ROIC | 8.61% |
ROA(3y)0.73%
ROA(5y)1.07%
ROE(3y)1.84%
ROE(5y)2.1%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
- 74SW has a Profit Margin of 6.36%. This is comparable to the rest of the industry: 74SW outperforms 53.51% of its industry peers.
- In the last couple of years the Profit Margin of 74SW has grown nicely.
- 74SW's Operating Margin of 13.57% is fine compared to the rest of the industry. 74SW outperforms 65.79% of its industry peers.
- In the last couple of years the Operating Margin of 74SW has grown nicely.
- 74SW's Gross Margin of 58.36% is on the low side compared to the rest of the industry. 74SW is outperformed by 64.91% of its industry peers.
- 74SW's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 13.57% | ||
| PM (TTM) | 6.36% | ||
| GM | 58.36% |
OM growth 3Y35.39%
OM growth 5Y24.47%
PM growth 3Y35.92%
PM growth 5Y36.2%
GM growth 3Y-0.24%
GM growth 5Y0.75%
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), 74SW is creating some value.
- Compared to 1 year ago, 74SW has more shares outstanding
- The number of shares outstanding for 74SW has been increased compared to 5 years ago.
- Compared to 1 year ago, 74SW has a worse debt to assets ratio.
2.2 Solvency
- 74SW has an Altman-Z score of 2.37. This is not the best score and indicates that 74SW is in the grey zone with still only limited risk for bankruptcy at the moment.
- Looking at the Altman-Z score, with a value of 2.37, 74SW is in line with its industry, outperforming 45.61% of the companies in the same industry.
- 74SW has a debt to FCF ratio of 3.77. This is a good value and a sign of high solvency as 74SW would need 3.77 years to pay back of all of its debts.
- The Debt to FCF ratio of 74SW (3.77) is comparable to the rest of the industry.
- A Debt/Equity ratio of 0.56 indicates that 74SW is somewhat dependend on debt financing.
- 74SW has a Debt to Equity ratio of 0.56. This is in the lower half of the industry: 74SW underperforms 68.42% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.56 | ||
| Debt/FCF | 3.77 | ||
| Altman-Z | 2.37 |
ROIC/WACC1.01
WACC8.53%
2.3 Liquidity
- A Current Ratio of 1.27 indicates that 74SW should not have too much problems paying its short term obligations.
- 74SW's Current ratio of 1.27 is in line compared to the rest of the industry. 74SW outperforms 42.11% of its industry peers.
- A Quick Ratio of 1.25 indicates that 74SW should not have too much problems paying its short term obligations.
- With a Quick ratio value of 1.25, 74SW perfoms like the industry average, outperforming 42.11% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.27 | ||
| Quick Ratio | 1.25 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an nice 11.45% over the past year.
- Measured over the past years, 74SW shows a very strong growth in Earnings Per Share. The EPS has been growing by 46.06% on average per year.
- The Revenue has grown by 103.99% in the past year. This is a very strong growth!
- 74SW shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 9.02% yearly.
EPS 1Y (TTM)11.45%
EPS 3Y62.16%
EPS 5Y46.06%
EPS Q2Q%66.81%
Revenue 1Y (TTM)103.99%
Revenue growth 3Y17.39%
Revenue growth 5Y9.02%
Sales Q2Q%131.39%
3.2 Future
- Based on estimates for the next years, 74SW will show a very strong growth in Earnings Per Share. The EPS will grow by 40.08% on average per year.
- The Revenue is expected to grow by 11.89% on average over the next years. This is quite good.
EPS Next Y45.29%
EPS Next 2Y42.38%
EPS Next 3Y35.23%
EPS Next 5Y40.08%
Revenue Next Year54.18%
Revenue Next 2Y26.33%
Revenue Next 3Y18.17%
Revenue Next 5Y11.89%
3.3 Evolution
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
- The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- With a Price/Earnings ratio of 22.25, 74SW is valued on the expensive side.
- 76.32% of the companies in the same industry are more expensive than 74SW, based on the Price/Earnings ratio.
- 74SW's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 28.39.
- With a Price/Forward Earnings ratio of 15.59, 74SW is valued correctly.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of 74SW indicates a rather cheap valuation: 74SW is cheaper than 84.21% of the companies listed in the same industry.
- Compared to an average S&P500 Price/Forward Earnings ratio of 25.72, 74SW is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.25 | ||
| Fwd PE | 15.59 |
4.2 Price Multiples
- 77.19% of the companies in the same industry are more expensive than 74SW, based on the Enterprise Value to EBITDA ratio.
- Based on the Price/Free Cash Flow ratio, 74SW is valued cheaper than 85.96% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 13.49 | ||
| EV/EBITDA | 11.29 |
4.3 Compensation for Growth
- 74SW's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
- 74SW's earnings are expected to grow with 35.23% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.49
PEG (5Y)0.48
EPS Next 2Y42.38%
EPS Next 3Y35.23%
5. Dividend
5.1 Amount
- 74SW does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
74SOFTWARE SA / 74SW.PA FAQ
Can you provide the ChartMill fundamental rating for 74SOFTWARE SA?
ChartMill assigns a fundamental rating of 5 / 10 to 74SW.PA.
Can you provide the valuation status for 74SOFTWARE SA?
ChartMill assigns a valuation rating of 7 / 10 to 74SOFTWARE SA (74SW.PA). This can be considered as Undervalued.
What is the profitability of 74SW stock?
74SOFTWARE SA (74SW.PA) has a profitability rating of 5 / 10.
How financially healthy is 74SOFTWARE SA?
The financial health rating of 74SOFTWARE SA (74SW.PA) is 3 / 10.
Can you provide the expected EPS growth for 74SW stock?
The Earnings per Share (EPS) of 74SOFTWARE SA (74SW.PA) is expected to grow by 45.29% in the next year.