LEONARDO DRS INC (DRS) Stock Fundamental Analysis
NASDAQ:DRS - Nasdaq - US52661A1088 - Common Stock - Currency: USD
Overall DRS gets a fundamental rating of 6 out of 10. We evaluated DRS against 65 industry peers in the Aerospace & Defense industry. DRS is in great health and has no worries on liquidiy or solvency at all, but the profibility rating is only average. DRS is valued quite expensive, but it does show an excellent growth. These ratings could make DRS a good candidate for growth investing.
1. Profitability
1.1 Basic Checks
In the past year DRS was profitable.
DRS had a positive operating cash flow in the past year.
DRS had positive earnings in each of the past 5 years.
DRS had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 5.09%, DRS is in the better half of the industry, outperforming 67.69% of the companies in the same industry.
DRS has a better Return On Equity (8.33%) than 61.54% of its industry peers.
With a decent Return On Invested Capital value of 8.24%, DRS is doing good in the industry, outperforming 69.23% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for DRS is significantly above the industry average of 7.87%.
The 3 year average ROIC (14.80%) for DRS is well above the current ROIC(8.24%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.09% | ||
| ROE | 8.33% | ||
| ROIC | 8.24% |
ROA(3y)6.8%
ROA(5y)7.59%
ROE(3y)11.53%
ROE(5y)11.69%
ROIC(3y)14.8%
ROIC(5y)12.07%
1.3 Margins
With a decent Profit Margin value of 6.59%, DRS is doing good in the industry, outperforming 67.69% of the companies in the same industry.
In the last couple of years the Profit Margin of DRS has declined.
DRS has a better Operating Margin (9.31%) than 61.54% of its industry peers.
In the last couple of years the Operating Margin of DRS has declined.
DRS has a Gross Margin (22.76%) which is comparable to the rest of the industry.
DRS's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.31% | ||
| PM (TTM) | 6.59% | ||
| GM | 22.76% |
OM growth 3Y-18.83%
OM growth 5YN/A
PM growth 3Y-32.5%
PM growth 5YN/A
GM growth 3Y-17.5%
GM growth 5Y-8.71%
2. Health
2.1 Basic Checks
DRS has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
DRS has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, DRS has more shares outstanding
The debt/assets ratio for DRS has been reduced compared to a year ago.
2.2 Solvency
DRS has an Altman-Z score of 4.01. This indicates that DRS is financially healthy and has little risk of bankruptcy at the moment.
DRS has a better Altman-Z score (4.01) than 64.62% of its industry peers.
DRS has a debt to FCF ratio of 1.96. This is a very positive value and a sign of high solvency as it would only need 1.96 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.96, DRS belongs to the top of the industry, outperforming 96.92% of the companies in the same industry.
DRS has a Debt/Equity ratio of 0.13. This is a healthy value indicating a solid balance between debt and equity.
With a decent Debt to Equity ratio value of 0.13, DRS is doing good in the industry, outperforming 78.46% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.13 | ||
| Debt/FCF | 1.96 | ||
| Altman-Z | 4.01 |
ROIC/WACC0.84
WACC9.81%
2.3 Liquidity
DRS has a Current Ratio of 1.94. This is a normal value and indicates that DRS is financially healthy and should not expect problems in meeting its short term obligations.
DRS has a Current ratio (1.94) which is in line with its industry peers.
A Quick Ratio of 1.62 indicates that DRS should not have too much problems paying its short term obligations.
DRS has a Quick ratio of 1.62. This is in the better half of the industry: DRS outperforms 63.08% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.94 | ||
| Quick Ratio | 1.62 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 28.77% over the past year.
Measured over the past years, DRS shows a very strong growth in Earnings Per Share. The EPS has been growing by 23.42% on average per year.
DRS shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 14.44%.
DRS shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 135.87% yearly.
EPS 1Y (TTM)28.77%
EPS 3Y23.42%
EPS 5YN/A
EPS Q2Q%22.58%
Revenue 1Y (TTM)14.44%
Revenue growth 3Y202.18%
Revenue growth 5Y135.87%
Sales Q2Q%5.94%
3.2 Future
Based on estimates for the next years, DRS will show a quite strong growth in Earnings Per Share. The EPS will grow by 12.67% on average per year.
Based on estimates for the next years, DRS will show a small growth in Revenue. The Revenue will grow by 6.78% on average per year.
EPS Next Y14.3%
EPS Next 2Y15.23%
EPS Next 3Y13.66%
EPS Next 5Y12.67%
Revenue Next Year9.12%
Revenue Next 2Y7.69%
Revenue Next 3Y6.99%
Revenue Next 5Y6.78%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
DRS is valuated quite expensively with a Price/Earnings ratio of 36.82.
The rest of the industry has a similar Price/Earnings ratio as DRS.
Compared to an average S&P500 Price/Earnings ratio of 27.63, DRS is valued a bit more expensive.
Based on the Price/Forward Earnings ratio of 32.21, the valuation of DRS can be described as expensive.
Compared to the rest of the industry, the Price/Forward Earnings ratio of DRS is on the same level as its industry peers.
The average S&P500 Price/Forward Earnings ratio is at 20.85. DRS is valued rather expensively when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 36.82 | ||
| Fwd PE | 32.21 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as DRS.
Based on the Price/Free Cash Flow ratio, DRS is valued a bit cheaper than 64.62% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 49.34 | ||
| EV/EBITDA | 24.06 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
DRS has a very decent profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as DRS's earnings are expected to grow with 13.66% in the coming years.
PEG (NY)2.58
PEG (5Y)N/A
EPS Next 2Y15.23%
EPS Next 3Y13.66%
5. Dividend
5.1 Amount
With a yearly dividend of 0.99%, DRS is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 1.36, DRS pays a better dividend. On top of this DRS pays more dividend than 83.08% of the companies listed in the same industry.
With a Dividend Yield of 0.99, DRS pays less dividend than the S&P500 average, which is at 2.51.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.99% |
5.2 History
DRS does not have a reliable dividend history as it only pays dividend since a couple or years.
Dividend Growth(5Y)N/A
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
DP0%
EPS Next 2Y15.23%
EPS Next 3Y13.66%
34.61
-1.85 (-5.07%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners26.88%
Inst Owner Change0.1%
Ins Owners0.21%
Ins Owner Change17.39%
Market Cap9.18B
Analysts81.67
Price Target38.91 (12.42%)
Short Float %2.26%
Short Ratio2.33
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.99% |
Yearly Dividend0
Dividend Growth(5Y)N/A
DP0%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)14.11%
Min EPS beat(2)6.36%
Max EPS beat(2)21.86%
EPS beat(4)4
Avg EPS beat(4)21.84%
Min EPS beat(4)6.36%
Max EPS beat(4)30.8%
EPS beat(8)8
Avg EPS beat(8)22.35%
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)2
Avg Revenue beat(2)3.38%
Min Revenue beat(2)3.09%
Max Revenue beat(2)3.68%
Revenue beat(4)4
Avg Revenue beat(4)5.58%
Min Revenue beat(4)3.09%
Max Revenue beat(4)9.58%
Revenue beat(8)7
Avg Revenue beat(8)4.12%
Revenue beat(12)10
Avg Revenue beat(12)483.67%
Revenue beat(16)12
Avg Revenue beat(16)362.68%
PT rev (1m)0%
PT rev (3m)3.09%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-4.81%
EPS NY rev (1m)0.47%
EPS NY rev (3m)0.47%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.39%
Revenue NY rev (1m)-0.03%
Revenue NY rev (3m)1.82%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 36.82 | ||
| Fwd PE | 32.21 | ||
| P/S | 2.84 | ||
| P/FCF | 49.34 | ||
| P/OCF | 33.86 | ||
| P/B | 3.59 | ||
| P/tB | 7.73 | ||
| EV/EBITDA | 24.06 |
EPS(TTM)0.94
EY2.72%
EPS(NY)1.07
Fwd EY3.1%
FCF(TTM)0.7
FCFY2.03%
OCF(TTM)1.02
OCFY2.95%
SpS12.2
BVpS9.64
TBVpS4.48
PEG (NY)2.58
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.09% | ||
| ROE | 8.33% | ||
| ROCE | 9.81% | ||
| ROIC | 8.24% | ||
| ROICexc | 10.23% | ||
| ROICexgc | 22.93% | ||
| OM | 9.31% | ||
| PM (TTM) | 6.59% | ||
| GM | 22.76% | ||
| FCFM | 5.75% |
ROA(3y)6.8%
ROA(5y)7.59%
ROE(3y)11.53%
ROE(5y)11.69%
ROIC(3y)14.8%
ROIC(5y)12.07%
ROICexc(3y)17.19%
ROICexc(5y)16.27%
ROICexgc(3y)41.83%
ROICexgc(5y)31.06%
ROCE(3y)17.68%
ROCE(5y)14.42%
ROICexcg growth 3Y5.24%
ROICexcg growth 5YN/A
ROICexc growth 3Y-19.58%
ROICexc growth 5YN/A
OM growth 3Y-18.83%
OM growth 5YN/A
PM growth 3Y-32.5%
PM growth 5YN/A
GM growth 3Y-17.5%
GM growth 5Y-8.71%
F-Score7
Asset Turnover0.77
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.13 | ||
| Debt/FCF | 1.96 | ||
| Debt/EBITDA | 0.88 | ||
| Cap/Depr | 93.41% | ||
| Cap/Sales | 2.63% | ||
| Interest Coverage | 11.15 | ||
| Cash Conversion | 69.13% | ||
| Profit Quality | 87.32% | ||
| Current Ratio | 1.94 | ||
| Quick Ratio | 1.62 | ||
| Altman-Z | 4.01 |
F-Score7
WACC9.81%
ROIC/WACC0.84
Cap/Depr(3y)88%
Cap/Depr(5y)129.75%
Cap/Sales(3y)2.39%
Cap/Sales(5y)3.79%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)28.77%
EPS 3Y23.42%
EPS 5YN/A
EPS Q2Q%22.58%
EPS Next Y14.3%
EPS Next 2Y15.23%
EPS Next 3Y13.66%
EPS Next 5Y12.67%
Revenue 1Y (TTM)14.44%
Revenue growth 3Y202.18%
Revenue growth 5Y135.87%
Sales Q2Q%5.94%
Revenue Next Year9.12%
Revenue Next 2Y7.69%
Revenue Next 3Y6.99%
Revenue Next 5Y6.78%
EBIT growth 1Y29.74%
EBIT growth 3Y145.27%
EBIT growth 5YN/A
EBIT Next Year42.76%
EBIT Next 3Y21.39%
EBIT Next 5YN/A
FCF growth 1Y28.28%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y32.2%
OCF growth 3YN/A
OCF growth 5YN/A