Taking everything into account, GMS scores 5 out of 10 in our fundamental rating. GMS was compared to 50 industry peers in the Trading Companies & Distributors industry. Both the profitability and the financial health of GMS get a neutral evaluation. Nothing too spectacular is happening here. GMS has a decent growth rate and is not valued too expensively.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

GMS had positive earnings in the past year.
GMS had a positive operating cash flow in the past year.
GMS had positive earnings in each of the past 5 years.
Each year in the past 5 years GMS had a positive operating cash flow.

1.2 Ratios

GMS's Return On Assets of 2.65% is in line compared to the rest of the industry. GMS outperforms 44.00% of its industry peers.
With a Return On Equity value of 7.01%, GMS perfoms like the industry average, outperforming 46.00% of the companies in the same industry.
With a Return On Invested Capital value of 6.19%, GMS perfoms like the industry average, outperforming 56.00% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for GMS is in line with the industry average of 9.64%.
The 3 year average ROIC (10.30%) for GMS is well above the current ROIC(6.19%). The reason for the recent decline needs to be investigated.

		Industry Rank	Sector Rank
ROA	2.65%
ROE	7.01%
ROIC	6.19%

ROA(3y)6.85%

ROA(5y)6.72%

ROE(3y)17.72%

ROE(5y)18.34%

ROIC(3y)10.3%

ROIC(5y)10%

1.3 Margins

The Profit Margin of GMS (1.86%) is comparable to the rest of the industry.
In the last couple of years the Profit Margin of GMS has grown nicely.
With a Operating Margin value of 5.03%, GMS is not doing good in the industry: 60.00% of the companies in the same industry are doing better.
GMS's Operating Margin has been stable in the last couple of years.
GMS has a Gross Margin of 31.15%. This is comparable to the rest of the industry: GMS outperforms 54.00% of its industry peers.
GMS's Gross Margin has been stable in the last couple of years.

		Industry Rank	Sector Rank
OM	5.03%
PM (TTM)	1.86%
GM	31.15%

OM growth 3Y-16.26%

OM growth 5Y0.26%

PM growth 3Y-29.19%

PM growth 5Y23.84%

GM growth 3Y-0.92%

GM growth 5Y-0.98%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so GMS is still creating some value.
Compared to 1 year ago, GMS has less shares outstanding
GMS has less shares outstanding than it did 5 years ago.
GMS has a better debt/assets ratio than last year.

2.2 Solvency

GMS has an Altman-Z score of 3.45. This indicates that GMS is financially healthy and has little risk of bankruptcy at the moment.
GMS's Altman-Z score of 3.45 is in line compared to the rest of the industry. GMS outperforms 56.00% of its industry peers.
GMS has a debt to FCF ratio of 4.00. This is a good value and a sign of high solvency as GMS would need 4.00 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 4.00, GMS is doing good in the industry, outperforming 68.00% of the companies in the same industry.
GMS has a Debt/Equity ratio of 0.87. This is a neutral value indicating GMS is somewhat dependend on debt financing.
GMS has a Debt to Equity ratio (0.87) which is in line with its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	0.87
Debt/FCF	4
Altman-Z	3.45

ROIC/WACC0.66

WACC9.43%

2.3 Liquidity

A Current Ratio of 2.11 indicates that GMS has no problem at all paying its short term obligations.
GMS's Current ratio of 2.11 is in line compared to the rest of the industry. GMS outperforms 56.00% of its industry peers.
GMS has a Quick Ratio of 1.31. This is a normal value and indicates that GMS is financially healthy and should not expect problems in meeting its short term obligations.
The Quick ratio of GMS (1.31) is comparable to the rest of the industry.

		Industry Rank	Sector Rank
Current Ratio	2.11
Quick Ratio	1.31

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

GMS shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -22.81%.
GMS shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 15.71% yearly.
Looking at the last year, GMS shows a decrease in Revenue. The Revenue has decreased by -1.10% in the last year.
GMS shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 11.21% yearly.

EPS 1Y (TTM)-22.81%

EPS 3Y-6.35%

EPS 5Y15.71%

EPS Q2Q%-8.81%

Revenue 1Y (TTM)-1.1%

Revenue growth 3Y5.96%

Revenue growth 5Y11.21%

Sales Q2Q%-2.36%

3.2 Future

Based on estimates for the next years, GMS will show a quite strong growth in Earnings Per Share. The EPS will grow by 11.83% on average per year.
GMS is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 1.94% yearly.

EPS Next Y2.35%

EPS Next 2Y10.15%

EPS Next 3Y11.83%

EPS Next 5YN/A

Revenue Next Year-0.22%

Revenue Next 2Y2.35%

Revenue Next 3Y1.94%

Revenue Next 5YN/A

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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.

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4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 18.36 indicates a rather expensive valuation of GMS.
72.00% of the companies in the same industry are more expensive than GMS, based on the Price/Earnings ratio.
The average S&P500 Price/Earnings ratio is at 28.32. GMS is valued slightly cheaper when compared to this.
With a Price/Forward Earnings ratio of 14.71, GMS is valued correctly.
Based on the Price/Forward Earnings ratio, GMS is valued a bit cheaper than the industry average as 72.00% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 25.57. GMS is valued slightly cheaper when compared to this.

		Industry Rank	Sector Rank
PE	18.36
Fwd PE	14.71

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, GMS is valued a bit cheaper than the industry average as 62.00% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of GMS indicates a rather cheap valuation: GMS is cheaper than 84.00% of the companies listed in the same industry.

		Industry Rank	Sector Rank
P/FCF	12.77
EV/EBITDA	12.36

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates GMS does not grow enough to justify the current Price/Earnings ratio.