GENPACT LTD (G) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:G - BMG3922B1072 - Common Stock
45.8 USD
-0.39 (-0.84%)
45.8 USD
0 (0%)
G gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 88 industry peers in the IT Services industry. G scores excellent points on both the profitability and health parts. This is a solid base for a good stock. G may be a bit undervalued, certainly considering the very reasonable score on growth These ratings could make G a good candidate for value and quality investing.
1. Profitability
1.1 Basic Checks
- G had positive earnings in the past year.
- G had a positive operating cash flow in the past year.
- G had positive earnings in each of the past 5 years.
- G had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- G has a Return On Assets of 10.28%. This is amongst the best in the industry. G outperforms 84.09% of its industry peers.
- G has a better Return On Equity (21.67%) than 85.23% of its industry peers.
- The Return On Invested Capital of G (14.49%) is better than 87.50% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for G is significantly below the industry average of 29.06%.
- The last Return On Invested Capital (14.49%) for G is above the 3 year average (12.82%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.28% | ||
| ROE | 21.67% | ||
| ROIC | 14.49% |
ROA(3y)10.38%
ROA(5y)8.98%
ROE(3y)22.97%
ROE(5y)21.04%
ROIC(3y)12.82%
ROIC(5y)11.64%
1.3 Margins
- G has a better Profit Margin (11.01%) than 80.68% of its industry peers.
- G's Profit Margin has improved in the last couple of years.
- G has a Operating Margin of 14.87%. This is in the better half of the industry: G outperforms 79.55% of its industry peers.
- In the last couple of years the Operating Margin of G has grown nicely.
- G has a Gross Margin (35.82%) which is comparable to the rest of the industry.
- G's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 14.87% | ||
| PM (TTM) | 11.01% | ||
| GM | 35.82% |
OM growth 3Y5.04%
OM growth 5Y3.32%
PM growth 3Y5.47%
PM growth 5Y4.47%
GM growth 3Y-0.14%
GM growth 5Y0.36%
2. Health
2.1 Basic Checks
- G has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
- G has less shares outstanding than it did 1 year ago.
- G has less shares outstanding than it did 5 years ago.
- Compared to 1 year ago, G has an improved debt to assets ratio.
2.2 Solvency
- G has an Altman-Z score of 3.61. This indicates that G is financially healthy and has little risk of bankruptcy at the moment.
- G has a Altman-Z score of 3.61. This is in the better half of the industry: G outperforms 62.50% of its industry peers.
- G has a debt to FCF ratio of 1.90. This is a very positive value and a sign of high solvency as it would only need 1.90 years to pay back of all of its debts.
- G's Debt to FCF ratio of 1.90 is fine compared to the rest of the industry. G outperforms 72.73% of its industry peers.
- A Debt/Equity ratio of 0.33 indicates that G is not too dependend on debt financing.
- Looking at the Debt to Equity ratio, with a value of 0.33, G is in line with its industry, outperforming 52.27% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.33 | ||
| Debt/FCF | 1.9 | ||
| Altman-Z | 3.61 |
ROIC/WACC1.63
WACC8.87%
2.3 Liquidity
- A Current Ratio of 1.51 indicates that G should not have too much problems paying its short term obligations.
- G has a Current ratio (1.51) which is in line with its industry peers.
- A Quick Ratio of 1.51 indicates that G should not have too much problems paying its short term obligations.
- G's Quick ratio of 1.51 is in line compared to the rest of the industry. G outperforms 45.45% of its industry peers.
- The current and quick ratio evaluation for G is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.51 | ||
| Quick Ratio | 1.51 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an nice 15.38% over the past year.
- Measured over the past years, G shows a quite strong growth in Earnings Per Share. The EPS has been growing by 9.38% on average per year.
- The Revenue has been growing slightly by 7.39% in the past year.
- G shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 6.25% yearly.
EPS 1Y (TTM)15.38%
EPS 3Y9.42%
EPS 5Y9.38%
EPS Q2Q%14.12%
Revenue 1Y (TTM)7.39%
Revenue growth 3Y5.83%
Revenue growth 5Y6.25%
Sales Q2Q%6.63%
3.2 Future
- The Earnings Per Share is expected to grow by 12.00% on average over the next years. This is quite good.
- Based on estimates for the next years, G will show a small growth in Revenue. The Revenue will grow by 7.07% on average per year.
EPS Next Y15%
EPS Next 2Y12.03%
EPS Next 3Y12%
EPS Next 5YN/A
Revenue Next Year6.79%
Revenue Next 2Y6.88%
Revenue Next 3Y7.07%
Revenue Next 5YN/A
3.3 Evolution
- The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
- The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 12.72, the valuation of G can be described as correct.
- Compared to the rest of the industry, the Price/Earnings ratio of G indicates a rather cheap valuation: G is cheaper than 82.95% of the companies listed in the same industry.
- G's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.21.
- A Price/Forward Earnings ratio of 11.37 indicates a reasonable valuation of G.
- Based on the Price/Forward Earnings ratio, G is valued cheaply inside the industry as 86.36% of the companies are valued more expensively.
- Compared to an average S&P500 Price/Forward Earnings ratio of 24.26, G is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.72 | ||
| Fwd PE | 11.37 |
4.2 Price Multiples
- G's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. G is cheaper than 79.55% of the companies in the same industry.
- Based on the Price/Free Cash Flow ratio, G is valued cheaper than 84.09% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.29 | ||
| EV/EBITDA | 10.07 |
4.3 Compensation for Growth
- The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
- The excellent profitability rating of G may justify a higher PE ratio.
- G's earnings are expected to grow with 12.00% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.85
PEG (5Y)1.36
EPS Next 2Y12.03%
EPS Next 3Y12%
5. Dividend
5.1 Amount
- G has a Yearly Dividend Yield of 1.47%.
- Compared to an average industry Dividend Yield of 0.43, G pays a better dividend. On top of this G pays more dividend than 87.50% of the companies listed in the same industry.
- G's Dividend Yield is comparable with the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.47% |
5.2 History
- On average, the dividend of G grows each year by 12.42%, which is quite nice.
- G has been paying a dividend for at least 10 years, so it has a reliable track record.
- As G did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
Dividend Growth(5Y)12.42%
Div Incr Years7
Div Non Decr Years7
5.3 Sustainability
- 20.93% of the earnings are spent on dividend by G. This is a low number and sustainable payout ratio.
- The dividend of G is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP20.93%
EPS Next 2Y12.03%
EPS Next 3Y12%
GENPACT LTD / G FAQ
What is the fundamental rating for G stock?
ChartMill assigns a fundamental rating of 7 / 10 to G.
What is the valuation status for G stock?
ChartMill assigns a valuation rating of 8 / 10 to GENPACT LTD (G). This can be considered as Undervalued.
What is the profitability of G stock?
GENPACT LTD (G) has a profitability rating of 8 / 10.
How financially healthy is GENPACT LTD?
The financial health rating of GENPACT LTD (G) is 8 / 10.
Is the dividend of GENPACT LTD sustainable?
The dividend rating of GENPACT LTD (G) is 6 / 10 and the dividend payout ratio is 20.93%.