LEONARDO DRS INC (DRS) Stock Fundamental Analysis
USA - NASDAQ:DRS - US52661A1088 - Common Stock
41.54 USD
-0.24 (-0.57%)
41.34 USD
-0.2 (-0.48%)
DRS gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 69 industry peers in the Aerospace & Defense industry. DRS has an excellent financial health rating, but there are some minor concerns on its profitability. DRS is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year DRS was profitable.
In the past year DRS had a positive cash flow from operations.
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
DRS has a Return On Assets of 6.13%. This is in the better half of the industry: DRS outperforms 73.91% of its industry peers.
Looking at the Return On Equity, with a value of 9.62%, DRS is in the better half of the industry, outperforming 65.22% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 8.81%, DRS is in the better half of the industry, outperforming 79.71% 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 8.29%.
The last Return On Invested Capital (8.81%) for DRS is well below the 3 year average (14.80%), which needs to be investigated, but indicates that DRS had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.13% | ||
| ROE | 9.62% | ||
| ROIC | 8.81% |
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
DRS has a Profit Margin of 7.31%. This is in the better half of the industry: DRS outperforms 68.12% of its industry peers.
DRS's Profit Margin has declined in the last couple of years.
With a Operating Margin value of 9.56%, DRS perfoms like the industry average, outperforming 59.42% of the companies in the same industry.
DRS's Operating Margin has declined in the last couple of years.
Looking at the Gross Margin, with a value of 23.15%, DRS is in line with its industry, outperforming 42.03% of the companies in the same industry.
DRS's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.56% | ||
| PM (TTM) | 7.31% | ||
| GM | 23.15% |
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.
The number of shares outstanding for DRS has been increased compared to 1 year ago.
Compared to 5 years ago, DRS has more shares outstanding
DRS has a better debt/assets ratio than last year.
2.2 Solvency
DRS has an Altman-Z score of 5.07. 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 5.07, DRS is in the better half of the industry, outperforming 62.32% of the companies in the same industry.
The Debt to FCF ratio of DRS is 1.50, which is an excellent value as it means it would take DRS, only 1.50 years of fcf income to pay off all of its debts.
With an excellent Debt to FCF ratio value of 1.50, DRS belongs to the best of the industry, outperforming 97.10% of the companies in the same industry.
A Debt/Equity ratio of 0.13 indicates that DRS is not too dependend on debt financing.
DRS has a better Debt to Equity ratio (0.13) than 76.81% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.13 | ||
| Debt/FCF | 1.5 | ||
| Altman-Z | 5.07 |
ROIC/WACC0.91
WACC9.72%
2.3 Liquidity
A Current Ratio of 2.11 indicates that DRS has no problem at all paying its short term obligations.
DRS has a Current ratio of 2.11. This is comparable to the rest of the industry: DRS outperforms 46.38% of its industry peers.
A Quick Ratio of 1.70 indicates that DRS should not have too much problems paying its short term obligations.
DRS's Quick ratio of 1.70 is fine compared to the rest of the industry. DRS outperforms 66.67% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.11 | ||
| Quick Ratio | 1.7 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 26.51% over the past year.
The Earnings Per Share has been growing by 23.42% on average over the past years. This is a very strong growth
Looking at the last year, DRS shows a quite strong growth in Revenue. The Revenue has grown by 11.43% in the last year.
DRS shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 135.87% yearly.
EPS 1Y (TTM)26.51%
EPS 3Y23.42%
EPS 5YN/A
EPS Q2Q%27.78%
Revenue 1Y (TTM)11.43%
Revenue growth 3Y202.18%
Revenue growth 5Y135.87%
Sales Q2Q%10.09%
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 9.27% on average per year.
Based on estimates for the next years, DRS will show a small growth in Revenue. The Revenue will grow by 7.20% on average per year.
EPS Next Y18.67%
EPS Next 2Y16.92%
EPS Next 3Y14.62%
EPS Next 5Y9.27%
Revenue Next Year12.25%
Revenue Next 2Y9.4%
Revenue Next 3Y8.03%
Revenue Next 5Y7.2%
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 decreasing.
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 39.56, the valuation of DRS can be described as expensive.
Based on the Price/Earnings ratio, DRS is valued a bit cheaper than the industry average as 62.32% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 27.20, DRS is valued a bit more expensive.
With a Price/Forward Earnings ratio of 32.33, DRS can be considered very expensive at the moment.
Compared to the rest of the industry, the Price/Forward Earnings ratio of DRS indicates a somewhat cheap valuation: DRS is cheaper than 60.87% 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 (22.70), we can say DRS is valued slightly more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 39.56 | ||
| Fwd PE | 32.33 |
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.
Based on the Price/Free Cash Flow ratio, DRS is valued a bit cheaper than 65.22% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 47.04 | ||
| EV/EBITDA | 26.71 |
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.
DRS's earnings are expected to grow with 14.62% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.12
PEG (5Y)N/A
EPS Next 2Y16.92%
EPS Next 3Y14.62%
5. Dividend
5.1 Amount
With a yearly dividend of 0.87%, DRS is not a good candidate for dividend investing.
DRS's Dividend Yield is rather good when compared to the industry average which is at 1.47. DRS pays more dividend than 84.06% of the companies in the same industry.
With a Dividend Yield of 0.87, DRS pays less dividend than the S&P500 average, which is at 2.38.
| 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
19.20% of the earnings are spent on dividend by DRS. This is a low number and sustainable payout ratio.
DP19.2%
EPS Next 2Y16.92%
EPS Next 3Y14.62%
41.54
-0.24 (-0.57%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners26.77%
Inst Owner Change-6.52%
Ins Owners0.32%
Ins Owner Change36.31%
Market Cap11.05B
Analysts81.43
Price Target50.21 (20.87%)
Short Float %3%
Short Ratio2.03
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.87% |
Yearly Dividend0
Dividend Growth(5Y)N/A
DP19.2%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)13.27%
Min EPS beat(2)6.54%
Max EPS beat(2)20.01%
EPS beat(4)4
Avg EPS beat(4)13.69%
Min EPS beat(4)6.36%
Max EPS beat(4)21.86%
EPS beat(8)8
Avg EPS beat(8)18.04%
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)1
Avg Revenue beat(2)3.29%
Min Revenue beat(2)-0.81%
Max Revenue beat(2)7.38%
Revenue beat(4)3
Avg Revenue beat(4)3.34%
Min Revenue beat(4)-0.81%
Max Revenue beat(4)7.38%
Revenue beat(8)7
Avg Revenue beat(8)4.36%
Revenue beat(12)9
Avg Revenue beat(12)159.28%
Revenue beat(16)11
Avg Revenue beat(16)362.96%
PT rev (1m)0.71%
PT rev (3m)10.79%
EPS NQ rev (1m)-0.4%
EPS NQ rev (3m)2.03%
EPS NY rev (1m)2.37%
EPS NY rev (3m)2.42%
Revenue NQ rev (1m)-0.05%
Revenue NQ rev (3m)6.04%
Revenue NY rev (1m)1.8%
Revenue NY rev (3m)1.86%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 39.56 | ||
| Fwd PE | 32.33 | ||
| P/S | 3.23 | ||
| P/FCF | 47.04 | ||
| P/OCF | 32.9 | ||
| P/B | 4.25 | ||
| P/tB | 8.9 | ||
| EV/EBITDA | 26.71 |
EPS(TTM)1.05
EY2.53%
EPS(NY)1.28
Fwd EY3.09%
FCF(TTM)0.88
FCFY2.13%
OCF(TTM)1.26
OCFY3.04%
SpS12.86
BVpS9.77
TBVpS4.67
PEG (NY)2.12
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.13% | ||
| ROE | 9.62% | ||
| ROCE | 10.48% | ||
| ROIC | 8.81% | ||
| ROICexc | 9.67% | ||
| ROICexgc | 18.52% | ||
| OM | 9.56% | ||
| PM (TTM) | 7.31% | ||
| GM | 23.15% | ||
| FCFM | 6.87% |
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-Score9
Asset Turnover0.84
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.13 | ||
| Debt/FCF | 1.5 | ||
| Debt/EBITDA | 0.79 | ||
| Cap/Depr | 109.78% | ||
| Cap/Sales | 2.95% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 80.19% | ||
| Profit Quality | 94% | ||
| Current Ratio | 2.11 | ||
| Quick Ratio | 1.7 | ||
| Altman-Z | 5.07 |
F-Score9
WACC9.72%
ROIC/WACC0.91
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)26.51%
EPS 3Y23.42%
EPS 5YN/A
EPS Q2Q%27.78%
EPS Next Y18.67%
EPS Next 2Y16.92%
EPS Next 3Y14.62%
EPS Next 5Y9.27%
Revenue 1Y (TTM)11.43%
Revenue growth 3Y202.18%
Revenue growth 5Y135.87%
Sales Q2Q%10.09%
Revenue Next Year12.25%
Revenue Next 2Y9.4%
Revenue Next 3Y8.03%
Revenue Next 5Y7.2%
EBIT growth 1Y22.01%
EBIT growth 3Y145.27%
EBIT growth 5YN/A
EBIT Next Year42.07%
EBIT Next 3Y22.01%
EBIT Next 5Y15.46%
FCF growth 1Y266.67%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y573.24%
OCF growth 3YN/A
OCF growth 5YN/A