40.99 USD
-0.29 (-0.7%)
41.5 USD
+0.51 (+1.24%)
DRS gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 73 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 not overvalued while it is showing excellent growth. This is an interesting combination. These ratings would make DRS suitable 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.
- Each year in the past 5 years DRS has been profitable.
- Of the past 5 years DRS 4 years had a positive operating cash flow.
1.2 Ratios
- The Return On Assets of DRS (6.24%) is better than 73.97% of its industry peers.
- The Return On Equity of DRS (10.01%) is better than 67.12% of its industry peers.
- DRS has a Return On Invested Capital of 9.17%. This is in the better half of the industry: DRS outperforms 78.08% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for DRS is significantly above the industry average of 8.56%.
- The 3 year average ROIC (14.80%) for DRS is well above the current ROIC(9.17%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.24% | ||
| ROE | 10.01% | ||
| ROIC | 9.17% |
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
- Looking at the Profit Margin, with a value of 7.43%, DRS is in the better half of the industry, outperforming 68.49% 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 (9.67%) than 60.27% of its industry peers.
- DRS's Operating Margin has declined in the last couple of years.
- DRS's Gross Margin of 23.40% is in line compared to the rest of the industry. DRS outperforms 47.95% of its industry peers.
- DRS's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.67% | ||
| PM (TTM) | 7.43% | ||
| GM | 23.4% |
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.
- Compared to 1 year ago, DRS has more shares outstanding
- The number of shares outstanding for DRS has been increased compared to 5 years ago.
- Compared to 1 year ago, DRS has an improved debt to assets ratio.
2.2 Solvency
- DRS has an Altman-Z score of 4.72. This indicates that DRS is financially healthy and has little risk of bankruptcy at the moment.
- DRS has a Altman-Z score of 4.72. This is comparable to the rest of the industry: DRS outperforms 57.53% of its industry peers.
- DRS has a debt to FCF ratio of 1.32. This is a very positive value and a sign of high solvency as it would only need 1.32 years to pay back of all of its debts.
- The Debt to FCF ratio of DRS (1.32) is better than 95.89% of its industry peers.
- A Debt/Equity ratio of 0.12 indicates that DRS is not too dependend on debt financing.
- The Debt to Equity ratio of DRS (0.12) is better than 78.08% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.12 | ||
| Debt/FCF | 1.32 | ||
| Altman-Z | 4.72 |
ROIC/WACC0.93
WACC9.86%
2.3 Liquidity
- A Current Ratio of 2.00 indicates that DRS has no problem at all paying its short term obligations.
- With a Current ratio value of 2.00, DRS is not doing good in the industry: 61.64% of the companies in the same industry are doing better.
- DRS has a Quick Ratio of 1.63. 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 better Quick ratio (1.63) than 60.27% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2 | ||
| Quick Ratio | 1.63 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an impressive 26.44% 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.
- Looking at the last year, DRS shows a quite strong growth in Revenue. The Revenue has grown by 12.27% in the last year.
- Measured over the past years, DRS shows a very strong growth in Revenue. The Revenue has been growing by 135.87% on average per year.
EPS 1Y (TTM)26.44%
EPS 3Y23.42%
EPS 5YN/A
EPS Q2Q%20.83%
Revenue 1Y (TTM)12.27%
Revenue growth 3Y202.18%
Revenue growth 5Y135.87%
Sales Q2Q%18.23%
3.2 Future
- DRS is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 12.13% yearly.
- DRS is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.27% yearly.
EPS Next Y17.65%
EPS Next 2Y16.17%
EPS Next 3Y14.55%
EPS Next 5Y12.13%
Revenue Next Year12.22%
Revenue Next 2Y9.42%
Revenue Next 3Y8.03%
Revenue Next 5Y7.27%
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.
- The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 37.26, the valuation of DRS can be described as expensive.
- Based on the Price/Earnings ratio, DRS is valued a bit cheaper than 75.34% of the companies in the same industry.
- DRS is valuated rather expensively when we compare the Price/Earnings ratio to 27.21, which is the current average of the S&P500 Index.
- A Price/Forward Earnings ratio of 32.31 indicates a quite expensive valuation of DRS.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of DRS indicates a somewhat cheap valuation: DRS is cheaper than 69.86% of the companies listed in the same industry.
- When comparing the Price/Forward Earnings ratio of DRS to the average of the S&P500 Index (25.98), we can say DRS is valued slightly more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 37.26 | ||
| Fwd PE | 32.31 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, DRS is valued a bit cheaper than the industry average as 63.01% of the companies are valued more expensively.
- DRS's Price/Free Cash Flow ratio is rather cheap when compared to the industry. DRS is cheaper than 80.82% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 41.15 | ||
| EV/EBITDA | 25.05 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates DRS does not grow enough to justify the current Price/Earnings ratio.
- The decent profitability rating of DRS may justify a higher PE ratio.
- A more expensive valuation may be justified as DRS's earnings are expected to grow with 14.55% in the coming years.
PEG (NY)2.11
PEG (5Y)N/A
EPS Next 2Y16.17%
EPS Next 3Y14.55%
5. Dividend
5.1 Amount
- DRS has a yearly dividend return of 0.87%, which is pretty low.
- DRS's Dividend Yield is rather good when compared to the industry average which is at 0.34. DRS pays more dividend than 87.67% of the companies in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.81, DRS's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.87% |
5.2 History
- DRS is new to the dividend game and has less than 3 years of track record.
Dividend Growth(5Y)N/A
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
- DRS pays out 27.17% of its income as dividend. This is a sustainable payout ratio.
DP27.17%
EPS Next 2Y16.17%
EPS Next 3Y14.55%
LEONARDO DRS INC / DRS FAQ
Can you provide the ChartMill fundamental rating for LEONARDO DRS INC?
ChartMill assigns a fundamental rating of 6 / 10 to DRS.
Can you provide the valuation status for LEONARDO DRS INC?
ChartMill assigns a valuation rating of 4 / 10 to LEONARDO DRS INC (DRS). This can be considered as Fairly Valued.
How profitable is LEONARDO DRS INC (DRS) stock?
LEONARDO DRS INC (DRS) has a profitability rating of 6 / 10.
What are the PE and PB ratios of LEONARDO DRS INC (DRS) stock?
The Price/Earnings (PE) ratio for LEONARDO DRS INC (DRS) is 37.26 and the Price/Book (PB) ratio is 4.12.
How sustainable is the dividend of LEONARDO DRS INC (DRS) stock?
The dividend rating of LEONARDO DRS INC (DRS) is 3 / 10 and the dividend payout ratio is 27.17%.