LEONARDO DRS INC (DRS) Stock Fundamental Analysis
NASDAQ:DRS - Nasdaq - US52661A1088 - Common Stock - Currency: USD
Overall DRS gets a fundamental rating of 5 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 not valued too expensively and it also shows a decent growth rate.
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 4 of the past 5 years.
In multiple years DRS reported negative operating cash flow during the last 5 years.
1.2 Ratios
DRS has a Return On Assets of 5.13%. This is in the better half of the industry: DRS outperforms 64.06% of its industry peers.
DRS's Return On Equity of 8.00% is fine compared to the rest of the industry. DRS outperforms 60.94% of its industry peers.
The Return On Invested Capital of DRS (7.84%) is better than 68.75% of its industry peers.
The Average Return On Invested Capital over the past 3 years for DRS is significantly above the industry average of 7.98%.
The last Return On Invested Capital (7.84%) for DRS is well below the 3 year average (15.17%), which needs to be investigated, but indicates that DRS had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.13% | ||
| ROE | 8% | ||
| ROIC | 7.84% |
ROA(3y)9.21%
ROA(5y)5.95%
ROE(3y)14.12%
ROE(5y)9.06%
ROIC(3y)15.17%
ROIC(5y)N/A
1.3 Margins
DRS has a better Profit Margin (6.23%) than 60.94% of its industry peers.
DRS's Profit Margin has improved in the last couple of years.
DRS's Operating Margin of 8.93% is in line compared to the rest of the industry. DRS outperforms 59.38% of its industry peers.
In the last couple of years the Operating Margin of DRS has grown nicely.
DRS's Gross Margin of 22.37% is in line compared to the rest of the industry. DRS outperforms 45.31% of its industry peers.
DRS's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 8.93% | ||
| PM (TTM) | 6.23% | ||
| GM | 22.37% |
OM growth 3Y5.86%
OM growth 5Y64.34%
PM growth 3Y-6.82%
PM growth 5Y52.78%
GM growth 3Y-14.85%
GM growth 5Y-8.84%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so DRS is still creating some value.
DRS has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
2.2 Solvency
DRS has an Altman-Z score of 3.97. This indicates that DRS is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.97, DRS is in the better half of the industry, outperforming 62.50% of the companies in the same industry.
The Debt to FCF ratio of DRS is 1.36, which is an excellent value as it means it would take DRS, only 1.36 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of DRS (1.36) is better than 92.19% of its industry peers.
DRS has a Debt/Equity ratio of 0.14. This is a healthy value indicating a solid balance between debt and equity.
DRS has a better Debt to Equity ratio (0.14) than 79.69% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.14 | ||
| Debt/FCF | 1.36 | ||
| Altman-Z | 3.97 |
ROIC/WACC0.83
WACC9.48%
2.3 Liquidity
A Current Ratio of 2.11 indicates that DRS has no problem at all paying its short term obligations.
The Current ratio of DRS (2.11) is comparable to the rest of the industry.
A Quick Ratio of 1.70 indicates that DRS should not have too much problems paying its short term obligations.
DRS has a Quick ratio of 1.70. This is in the better half of the industry: DRS outperforms 68.75% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.11 | ||
| Quick Ratio | 1.7 |
3. Growth
3.1 Past
DRS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 28.77%, which is quite impressive.
DRS shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 23.42% yearly.
EPS 1Y (TTM)28.77%
EPS 3Y23.42%
EPS 5YN/A
EPS Q2Q%22.58%
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%5.94%
3.2 Future
The Earnings Per Share is expected to grow by 13.55% on average over the next years. This is quite good.
Based on estimates for the next years, DRS will show a small growth in Revenue. The Revenue will grow by 7.14% on average per year.
EPS Next Y13.76%
EPS Next 2Y13.55%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year7.16%
Revenue Next 2Y7.14%
Revenue Next 3YN/A
Revenue Next 5YN/A
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 33.19, the valuation of DRS can be described as expensive.
Compared to the rest of the industry, the Price/Earnings ratio of DRS indicates a somewhat cheap valuation: DRS is cheaper than 65.63% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 30.30, DRS is valued at the same level.
The Price/Forward Earnings ratio is 29.18, which means the current valuation is very expensive for DRS.
Based on the Price/Forward Earnings ratio, DRS is valued a bit cheaper than 65.63% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.06, DRS is valued a bit more expensive.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 33.19 | ||
| Fwd PE | 29.18 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of DRS is on the same level as its industry peers.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of DRS indicates a rather cheap valuation: DRS is cheaper than 81.25% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 30.67 | ||
| EV/EBITDA | 22.51 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of DRS may justify a higher PE ratio.
DRS's earnings are expected to grow with 13.55% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.41
PEG (5Y)N/A
EPS Next 2Y13.55%
EPS Next 3YN/A
5. Dividend
5.1 Amount
DRS does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
31.2
+1.66 (+5.62%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners27.27%
Inst Owner Change-0.93%
Ins Owners0.13%
Ins Owner Change-31.23%
Market Cap8.25B
Analysts78.33
Price Target37.87 (21.38%)
Short Float %2.14%
Short Ratio2.77
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly Dividend0
Dividend Growth(5Y)N/A
DP0%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)26.33%
Min EPS beat(2)21.86%
Max EPS beat(2)30.8%
EPS beat(4)4
Avg EPS beat(4)21.12%
Min EPS beat(4)3.46%
Max EPS beat(4)30.8%
EPS beat(8)8
Avg EPS beat(8)24.52%
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)6.63%
Min Revenue beat(2)3.68%
Max Revenue beat(2)9.58%
Revenue beat(4)4
Avg Revenue beat(4)5.79%
Min Revenue beat(4)3.68%
Max Revenue beat(4)9.58%
Revenue beat(8)6
Avg Revenue beat(8)2.68%
Revenue beat(12)9
Avg Revenue beat(12)483.38%
Revenue beat(16)12
Avg Revenue beat(16)362.58%
PT rev (1m)0.34%
PT rev (3m)19.76%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0.66%
EPS NY rev (1m)0%
EPS NY rev (3m)0.18%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 33.19 | ||
| Fwd PE | 29.18 | ||
| P/S | 2.59 | ||
| P/FCF | 30.67 | ||
| P/OCF | 24.05 | ||
| P/B | 3.33 | ||
| P/tB | 7.51 | ||
| EV/EBITDA | 22.51 |
EPS(TTM)0.94
EY3.01%
EPS(NY)1.07
Fwd EY3.43%
FCF(TTM)1.02
FCFY3.26%
OCF(TTM)1.3
OCFY4.16%
SpS12.02
BVpS9.36
TBVpS4.15
PEG (NY)2.41
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.13% | ||
| ROE | 8% | ||
| ROCE | 9.53% | ||
| ROIC | 7.84% | ||
| ROICexc | 8.4% | ||
| ROICexgc | 16.62% | ||
| OM | 8.93% | ||
| PM (TTM) | 6.23% | ||
| GM | 22.37% | ||
| FCFM | 8.46% |
ROA(3y)9.21%
ROA(5y)5.95%
ROE(3y)14.12%
ROE(5y)9.06%
ROIC(3y)15.17%
ROIC(5y)N/A
ROICexc(3y)19.91%
ROICexc(5y)N/A
ROICexgc(3y)39.89%
ROICexgc(5y)N/A
ROCE(3y)18.51%
ROCE(5y)N/A
ROICexcg growth 3Y25.31%
ROICexcg growth 5Y91.41%
ROICexc growth 3Y-5.87%
ROICexc growth 5Y61.22%
OM growth 3Y5.86%
OM growth 5Y64.34%
PM growth 3Y-6.82%
PM growth 5Y52.78%
GM growth 3Y-14.85%
GM growth 5Y-8.84%
F-Score7
Asset Turnover0.82
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.14 | ||
| Debt/FCF | 1.36 | ||
| Debt/EBITDA | 0.92 | ||
| Cap/Depr | 82.22% | ||
| Cap/Sales | 2.33% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 91.71% | ||
| Profit Quality | 135.86% | ||
| Current Ratio | 2.11 | ||
| Quick Ratio | 1.7 | ||
| Altman-Z | 3.97 |
F-Score7
WACC9.48%
ROIC/WACC0.83
Cap/Depr(3y)113.06%
Cap/Depr(5y)185.66%
Cap/Sales(3y)3.27%
Cap/Sales(5y)5.31%
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 Y13.76%
EPS Next 2Y13.55%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%5.94%
Revenue Next Year7.16%
Revenue Next 2Y7.14%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y33.33%
EBIT growth 3Y253.04%
EBIT growth 5Y313.58%
EBIT Next Year51.02%
EBIT Next 3Y24.64%
EBIT Next 5YN/A
FCF growth 1Y553.13%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y521.21%
OCF growth 3Y284.37%
OCF growth 5YN/A