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GDS HOLDINGS LTD - ADR (GDS) Stock Fundamental Analysis

NASDAQ:GDS - Nasdaq - US36165L1089 - ADR

22.855  -0.66 (-2.83%)

After market: 22.99 +0.13 (+0.59%)

Fundamental Rating

3

Taking everything into account, GDS scores 3 out of 10 in our fundamental rating. GDS was compared to 82 industry peers in the IT Services industry. Both the profitability and financial health of GDS have multiple concerns. GDS is valied quite expensively at the moment, while it does show a decent growth rate.


Dividend Valuation Growth Profitability Health

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2

1. Profitability

1.1 Basic Checks

GDS had negative earnings in the past year.
In the past year GDS had a positive cash flow from operations.
GDS had negative earnings in each of the past 5 years.
In the past 5 years GDS always reported a positive cash flow from operatings.
GDS Yearly Net Income VS EBIT VS OCF VS FCFGDS Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 0 2B -2B -4B -6B -8B

1.2 Ratios

GDS's Return On Assets of -5.32% is on the low side compared to the rest of the industry. GDS is outperformed by 64.56% of its industry peers.
GDS has a Return On Equity of -18.68%. This is in the lower half of the industry: GDS underperforms 63.29% of its industry peers.
GDS has a Return On Invested Capital (0.79%) which is comparable to the rest of the industry.
GDS had an Average Return On Invested Capital over the past 3 years of 0.68%. This is significantly below the industry average of 9.86%.
The 3 year average ROIC (0.68%) for GDS is below the current ROIC(0.79%), indicating increased profibility in the last year.
Industry RankSector Rank
ROA -5.32%
ROE -18.68%
ROIC 0.79%
ROA(3y)-3.23%
ROA(5y)-2.51%
ROE(3y)-11.07%
ROE(5y)-8.08%
ROIC(3y)0.68%
ROIC(5y)0.89%
GDS Yearly ROA, ROE, ROICGDS Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2016 2017 2018 2019 2020 2021 2022 2023 0 -5 -10 -15 -20

1.3 Margins

GDS's Operating Margin of 6.56% is fine compared to the rest of the industry. GDS outperforms 60.76% of its industry peers.
In the last couple of years the Operating Margin of GDS has declined.
Looking at the Gross Margin, with a value of 19.86%, GDS is doing worse than 82.28% of the companies in the same industry.
GDS's Gross Margin has declined in the last couple of years.
Industry RankSector Rank
OM 6.56%
PM (TTM) N/A
GM 19.86%
OM growth 3Y-21.97%
OM growth 5Y-1.57%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-10.59%
GM growth 5Y-2.83%
GDS Yearly Profit, Operating, Gross MarginsGDS Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2016 2017 2018 2019 2020 2021 2022 2023 0 20 -20 -40

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2

2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), GDS is destroying value.
GDS has about the same amout of shares outstanding than it did 1 year ago.
The number of shares outstanding for GDS has been increased compared to 5 years ago.
Compared to 1 year ago, GDS has a worse debt to assets ratio.
GDS Yearly Shares OutstandingGDS Yearly Shares OutstandingYearly Shares Outstanding 2016 2017 2018 2019 2020 2021 2022 2023 50M 100M 150M 200M
GDS Yearly Total Debt VS Total AssetsGDS Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2016 2017 2018 2019 2020 2021 2022 2023 20B 40B 60B

2.2 Solvency

Based on the Altman-Z score of 0.40, we must say that GDS is in the distress zone and has some risk of bankruptcy.
With a Altman-Z score value of 0.40, GDS is not doing good in the industry: 78.48% of the companies in the same industry are doing better.
A Debt/Equity ratio of 1.91 is on the high side and indicates that GDS has dependencies on debt financing.
GDS's Debt to Equity ratio of 1.91 is on the low side compared to the rest of the industry. GDS is outperformed by 77.22% of its industry peers.
Industry RankSector Rank
Debt/Equity 1.91
Debt/FCF N/A
Altman-Z 0.4
ROIC/WACC0.1
WACC8.21%
GDS Yearly LT Debt VS Equity VS FCFGDS Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 0 10B 20B 30B 40B

2.3 Liquidity

A Current Ratio of 1.39 indicates that GDS should not have too much problems paying its short term obligations.
With a Current ratio value of 1.39, GDS perfoms like the industry average, outperforming 41.77% of the companies in the same industry.
GDS has a Quick Ratio of 1.39. This is a normal value and indicates that GDS is financially healthy and should not expect problems in meeting its short term obligations.
The Quick ratio of GDS (1.39) is comparable to the rest of the industry.
Industry RankSector Rank
Current Ratio 1.39
Quick Ratio 1.39
GDS Yearly Current Assets VS Current LiabilitesGDS Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2016 2017 2018 2019 2020 2021 2022 2023 5B 10B 15B

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6

3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 29.35% over the past year.
The Revenue has been growing slightly by 6.76% in the past year.
Measured over the past years, GDS shows a very strong growth in Revenue. The Revenue has been growing by 28.95% on average per year.
EPS 1Y (TTM)29.35%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%53.33%
Revenue 1Y (TTM)6.76%
Revenue growth 3Y20.16%
Revenue growth 5Y28.95%
Sales Q2Q%17.73%

3.2 Future

GDS is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 23.68% yearly.
The Revenue is expected to grow by 16.65% on average over the next years. This is quite good.
EPS Next Y13.3%
EPS Next 2Y19.04%
EPS Next 3Y23.2%
EPS Next 5Y23.68%
Revenue Next Year15.41%
Revenue Next 2Y17.06%
Revenue Next 3Y16.63%
Revenue Next 5Y16.65%

3.3 Evolution

Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
GDS Yearly Revenue VS EstimatesGDS Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 5B 10B 15B 20B 25B
GDS Yearly EPS VS EstimatesGDS Yearly EPS VS EstimatesYearly EPS VS Estimates 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 0 5 -5

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1

4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings Ratio is negative for GDS. In the last year negative earnings were reported.
Also next year GDS is expected to report negative earnings again, which makes the also the Forward Price/Earnings Ratio negative.
Industry RankSector Rank
PE N/A
Fwd PE N/A
GDS Price Earnings VS Forward Price EarningsGDS Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 0 20 -20 40 -40

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of GDS is on the same level as its industry peers.
Industry RankSector Rank
P/FCF N/A
EV/EBITDA 21.44
GDS Per share dataGDS EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 5 10 15

4.3 Compensation for Growth

A more expensive valuation may be justified as GDS's earnings are expected to grow with 23.20% in the coming years.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y19.04%
EPS Next 3Y23.2%

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0

5. Dividend

5.1 Amount

GDS does not give a dividend.
Industry RankSector Rank
Dividend Yield N/A

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GDS HOLDINGS LTD - ADR

NASDAQ:GDS (1/21/2025, 8:02:58 PM)

After market: 22.99 +0.13 (+0.59%)

22.855

-0.66 (-2.83%)

Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)11-19 2024-11-19/amc
Earnings (Next)N/A N/A
Inst Owners37.8%
Inst Owner Change0%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap4.44B
Analysts84.62
Price Target20.9 (-8.55%)
Short Float %4.13%
Short Ratio4.47
Dividend
Industry RankSector Rank
Dividend Yield N/A
Yearly Dividend0.04
Dividend Growth(5Y)N/A
DP-1.28%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)18.96%
Min EPS beat(2)14.44%
Max EPS beat(2)23.48%
EPS beat(4)4
Avg EPS beat(4)25.42%
Min EPS beat(4)0.3%
Max EPS beat(4)63.44%
EPS beat(8)7
Avg EPS beat(8)29.48%
EPS beat(12)8
Avg EPS beat(12)9.37%
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)0
Avg Revenue beat(2)-2.1%
Min Revenue beat(2)-3.51%
Max Revenue beat(2)-0.69%
Revenue beat(4)0
Avg Revenue beat(4)-2.4%
Min Revenue beat(4)-3.51%
Max Revenue beat(4)-0.69%
Revenue beat(8)0
Avg Revenue beat(8)-2.39%
Revenue beat(12)1
Avg Revenue beat(12)-1.87%
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)1.66%
PT rev (3m)-0.1%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0%
EPS NY rev (1m)0%
EPS NY rev (3m)15%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)0.29%
Revenue NY rev (3m)0.08%
Valuation
Industry RankSector Rank
PE N/A
Fwd PE N/A
P/S 3.09
P/FCF N/A
P/OCF 16.97
P/B 1.44
P/tB 2.18
EV/EBITDA 21.44
EPS(TTM)-0.67
EYN/A
EPS(NY)-0.54
Fwd EYN/A
FCF(TTM)-2
FCFYN/A
OCF(TTM)1.35
OCFY5.89%
SpS7.41
BVpS15.87
TBVpS10.48
PEG (NY)N/A
PEG (5Y)N/A
Profitability
Industry RankSector Rank
ROA -5.32%
ROE -18.68%
ROCE 1%
ROIC 0.79%
ROICexc 0.93%
ROICexgc 1.06%
OM 6.56%
PM (TTM) N/A
GM 19.86%
FCFM N/A
ROA(3y)-3.23%
ROA(5y)-2.51%
ROE(3y)-11.07%
ROE(5y)-8.08%
ROIC(3y)0.68%
ROIC(5y)0.89%
ROICexc(3y)0.79%
ROICexc(5y)1.13%
ROICexgc(3y)0.92%
ROICexgc(5y)1.28%
ROCE(3y)0.9%
ROCE(5y)1.16%
ROICexcg growth 3Y-20.58%
ROICexcg growth 5Y-2.59%
ROICexc growth 3Y-21.57%
ROICexc growth 5Y-2.38%
OM growth 3Y-21.97%
OM growth 5Y-1.57%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-10.59%
GM growth 5Y-2.83%
F-Score4
Asset Turnover0.13
Health
Industry RankSector Rank
Debt/Equity 1.91
Debt/FCF N/A
Debt/EBITDA 12.79
Cap/Depr 177.75%
Cap/Sales 45.18%
Interest Coverage 250
Cash Conversion 56.85%
Profit Quality N/A
Current Ratio 1.39
Quick Ratio 1.39
Altman-Z 0.4
F-Score4
WACC8.21%
ROIC/WACC0.1
Cap/Depr(3y)291.01%
Cap/Depr(5y)361.11%
Cap/Sales(3y)99.28%
Cap/Sales(5y)112.09%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)29.35%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%53.33%
EPS Next Y13.3%
EPS Next 2Y19.04%
EPS Next 3Y23.2%
EPS Next 5Y23.68%
Revenue 1Y (TTM)6.76%
Revenue growth 3Y20.16%
Revenue growth 5Y28.95%
Sales Q2Q%17.73%
Revenue Next Year15.41%
Revenue Next 2Y17.06%
Revenue Next 3Y16.63%
Revenue Next 5Y16.65%
EBIT growth 1Y-0.58%
EBIT growth 3Y-6.24%
EBIT growth 5Y26.93%
EBIT Next Year691.64%
EBIT Next 3Y122.36%
EBIT Next 5Y75.13%
FCF growth 1Y61.61%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-14.41%
OCF growth 3Y86.01%
OCF growth 5YN/A