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IAA INC (IAA) Stock Fundamental Analysis

NYSE:IAA - New York Stock Exchange, Inc. - US4492531037 - Common Stock - Currency: USD

39.89  -0.04 (-0.1%)

After market: 40.1 +0.21 (+0.53%)

Fundamental Rating

6

Overall IAA gets a fundamental rating of 6 out of 10. We evaluated IAA against 83 industry peers in the Commercial Services & Supplies industry. IAA has an excellent profitability rating, but there are some minor concerns on its financial health. IAA has a decent growth rate and is not valued too expensively.


Dividend Valuation Growth Profitability Health

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9

1. Profitability

1.1 Basic Checks

IAA had positive earnings in the past year.
In the past year IAA had a positive cash flow from operations.
In the past 5 years IAA has always been profitable.
Each year in the past 5 years IAA had a positive operating cash flow.
IAA Yearly Net Income VS EBIT VS OCF VS FCFIAA Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 100M 200M 300M 400M

1.2 Ratios

IAA's Return On Assets of 8.69% is amongst the best of the industry. IAA outperforms 85.00% of its industry peers.
Looking at the Return On Equity, with a value of 51.54%, IAA belongs to the top of the industry, outperforming 98.75% of the companies in the same industry.
IAA has a better Return On Invested Capital (10.86%) than 83.75% of its industry peers.
The Average Return On Invested Capital over the past 3 years for IAA is significantly above the industry average of 10.74%.
The 3 year average ROIC (20.07%) for IAA is well above the current ROIC(10.86%). The reason for the recent decline needs to be investigated.
Industry RankSector Rank
ROA 8.69%
ROE 51.54%
ROIC 10.86%
ROA(3y)N/A
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)20.07%
ROIC(5y)N/A
IAA Yearly ROA, ROE, ROICIAA Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 0 100 -100 200

1.3 Margins

With an excellent Profit Margin value of 13.93%, IAA belongs to the best of the industry, outperforming 93.75% of the companies in the same industry.
In the last couple of years the Profit Margin of IAA has remained more or less at the same level.
The Operating Margin of IAA (19.87%) is better than 96.25% of its industry peers.
In the last couple of years the Operating Margin of IAA has remained more or less at the same level.
IAA's Gross Margin of 35.00% is fine compared to the rest of the industry. IAA outperforms 67.50% of its industry peers.
In the last couple of years the Gross Margin of IAA has remained more or less at the same level.
Industry RankSector Rank
OM 19.87%
PM (TTM) 13.93%
GM 35%
OM growth 3Y-3.51%
OM growth 5Y0.63%
PM growth 3Y1.19%
PM growth 5Y1.03%
GM growth 3Y-2.86%
GM growth 5Y-0.66%
IAA Yearly Profit, Operating, Gross MarginsIAA Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 10 20 30

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5

2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), IAA is creating value.
Compared to 1 year ago, IAA has less shares outstanding
Compared to 1 year ago, IAA has an improved debt to assets ratio.
IAA Yearly Shares OutstandingIAA Yearly Shares OutstandingYearly Shares Outstanding 2016 2017 2018 2019 2020 2021 2022 20M 40M 60M 80M 100M
IAA Yearly Total Debt VS Total AssetsIAA Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2016 2017 2018 2019 2020 2021 2022 1B 2B 3B

2.2 Solvency

An Altman-Z score of 2.57 indicates that IAA is not a great score, but indicates only limited risk for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 2.57, IAA is in the better half of the industry, outperforming 67.50% of the companies in the same industry.
The Debt to FCF ratio of IAA is 5.62, which is a neutral value as it means it would take IAA, 5.62 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 5.62, IAA is in the better half of the industry, outperforming 80.00% of the companies in the same industry.
A Debt/Equity ratio of 1.95 is on the high side and indicates that IAA has dependencies on debt financing.
The Debt to Equity ratio of IAA (1.95) is worse than 83.75% of its industry peers.
Industry RankSector Rank
Debt/Equity 1.95
Debt/FCF 5.62
Altman-Z 2.57
ROIC/WACC1.31
WACC8.31%
IAA Yearly LT Debt VS Equity VS FCFIAA Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 0 500M 1B

2.3 Liquidity

IAA has a Current Ratio of 1.75. This is a normal value and indicates that IAA is financially healthy and should not expect problems in meeting its short term obligations.
IAA has a better Current ratio (1.75) than 65.00% of its industry peers.
IAA has a Quick Ratio of 1.64. This is a normal value and indicates that IAA is financially healthy and should not expect problems in meeting its short term obligations.
IAA has a Quick ratio of 1.64. This is in the better half of the industry: IAA outperforms 73.75% of its industry peers.
Industry RankSector Rank
Current Ratio 1.75
Quick Ratio 1.64
IAA Yearly Current Assets VS Current LiabilitesIAA Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2016 2017 2018 2019 2020 2021 2022 200M 400M 600M

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4

3. Growth

3.1 Past

IAA shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -2.50%.
Measured over the past years, IAA shows a quite strong growth in Earnings Per Share. The EPS has been growing by 12.69% on average per year.
Looking at the last year, IAA shows a quite strong growth in Revenue. The Revenue has grown by 14.23% in the last year.
IAA shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 11.48% yearly.
EPS 1Y (TTM)-2.5%
EPS 3Y14.83%
EPS 5Y12.69%
EPS Q2Q%0%
Revenue 1Y (TTM)14.23%
Revenue growth 3Y13.47%
Revenue growth 5Y11.48%
Sales Q2Q%-4.49%

3.2 Future

The Earnings Per Share is expected to decrease by -1.56% on average over the next years.
The Revenue is expected to grow by 4.47% on average over the next years.
EPS Next Y0.35%
EPS Next 2Y1.07%
EPS Next 3Y-1.56%
EPS Next 5YN/A
Revenue Next Year1.27%
Revenue Next 2Y2.88%
Revenue Next 3Y4.47%
Revenue Next 5YN/A

3.3 Evolution

The EPS growth rate is decreasing: in the next years the growth will be less than in the last 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.
IAA Yearly Revenue VS EstimatesIAA Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 500M 1B 1.5B 2B
IAA Yearly EPS VS EstimatesIAA Yearly EPS VS EstimatesYearly EPS VS Estimates 2019 2020 2021 2022 2023 2024 2025 0.5 1 1.5 2

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5

4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 17.05, the valuation of IAA can be described as rather expensive.
IAA's Price/Earnings ratio is a bit cheaper when compared to the industry. IAA is cheaper than 71.25% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 28.79. IAA is valued slightly cheaper when compared to this.
Based on the Price/Forward Earnings ratio of 16.99, the valuation of IAA can be described as correct.
68.75% of the companies in the same industry are more expensive than IAA, based on the Price/Forward Earnings ratio.
IAA's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 21.38.
Industry RankSector Rank
PE 17.05
Fwd PE 16.99
IAA Price Earnings VS Forward Price EarningsIAA Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 5 10 15 20 25

4.2 Price Multiples

IAA's Enterprise Value to EBITDA ratio is in line with the industry average.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of IAA indicates a somewhat cheap valuation: IAA is cheaper than 75.00% of the companies listed in the same industry.
Industry RankSector Rank
P/FCF 24.16
EV/EBITDA 12.04
IAA Per share dataIAA EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 5 10 15

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates IAA does not grow enough to justify the current Price/Earnings ratio.
The excellent profitability rating of IAA may justify a higher PE ratio.
PEG (NY)48.35
PEG (5Y)1.34
EPS Next 2Y1.07%
EPS Next 3Y-1.56%

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0

5. Dividend

5.1 Amount

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

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IAA INC

NYSE:IAA (3/20/2023, 8:15:31 PM)

After market: 40.1 +0.21 (+0.53%)

39.89

-0.04 (-0.1%)

Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryCommercial Services & Supplies
Earnings (Last)02-21 2023-02-21/amc
Earnings (Next)05-08 2023-05-08/amc
Inst OwnersN/A
Inst Owner ChangeN/A
Ins Owners0.03%
Ins Owner Change0%
Market Cap5.34B
Analysts48.57
Price Target45.9 (15.07%)
Short Float %N/A
Short RatioN/A
Dividend
Industry RankSector Rank
Dividend Yield N/A
Yearly DividendN/A
Dividend Growth(5Y)N/A
DP0%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-0.19%
Min EPS beat(2)-11.45%
Max EPS beat(2)11.06%
EPS beat(4)3
Avg EPS beat(4)5.19%
Min EPS beat(4)-11.45%
Max EPS beat(4)13.17%
EPS beat(8)N/A
Avg EPS beat(8)N/A
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)0.25%
Min Revenue beat(2)-2.85%
Max Revenue beat(2)3.35%
Revenue beat(4)2
Avg Revenue beat(4)0.32%
Min Revenue beat(4)-2.85%
Max Revenue beat(4)3.5%
Revenue beat(8)N/A
Avg Revenue beat(8)N/A
Revenue beat(12)N/A
Avg Revenue beat(12)N/A
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)-2.17%
PT rev (3m)-3.91%
EPS NQ rev (1m)2.11%
EPS NQ rev (3m)3.58%
EPS NY rev (1m)-0.5%
EPS NY rev (3m)-0.5%
Revenue NQ rev (1m)-2.23%
Revenue NQ rev (3m)-1.72%
Revenue NY rev (1m)-0.69%
Revenue NY rev (3m)-0.69%
Valuation
Industry RankSector Rank
PE 17.05
Fwd PE 16.99
P/S 2.54
P/FCF 24.16
P/OCF 13.37
P/B 9.41
P/tB N/A
EV/EBITDA 12.04
EPS(TTM)2.34
EY5.87%
EPS(NY)2.35
Fwd EY5.89%
FCF(TTM)1.65
FCFY4.14%
OCF(TTM)2.98
OCFY7.48%
SpS15.68
BVpS4.24
TBVpS-2.88
PEG (NY)48.35
PEG (5Y)1.34
Profitability
Industry RankSector Rank
ROA 8.69%
ROE 51.54%
ROCE N/A
ROIC 10.86%
ROICexc 11.62%
ROICexgc 17.57%
OM 19.87%
PM (TTM) 13.93%
GM 35%
FCFM N/A
ROA(3y)N/A
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)20.07%
ROIC(5y)N/A
ROICexc(3y)12.72%
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3Y-5.39%
ROICexcg growth 5Y-11.2%
ROICexc growth 3Y-4.05%
ROICexc growth 5Y-4.32%
OM growth 3Y-3.51%
OM growth 5Y0.63%
PM growth 3Y1.19%
PM growth 5Y1.03%
GM growth 3Y-2.86%
GM growth 5Y-0.66%
F-Score6
Asset Turnover0.62
Health
Industry RankSector Rank
Debt/Equity 1.95
Debt/FCF 5.62
Debt/EBITDA 2.38
Cap/Depr 168.85%
Cap/Sales N/A
Interest Coverage N/A
Cash Conversion N/A
Profit Quality 75.58%
Current Ratio 1.75
Quick Ratio 1.64
Altman-Z 2.57
F-Score6
WACC8.31%
ROIC/WACC1.31
Cap/Depr(3y)137.23%
Cap/Depr(5y)111.53%
Cap/Sales(3y)N/A
Cap/Sales(5y)N/A
Profit Quality(3y)86.17%
Profit Quality(5y)95.71%
High Growth Momentum
Growth
EPS 1Y (TTM)-2.5%
EPS 3Y14.83%
EPS 5Y12.69%
EPS Q2Q%0%
EPS Next Y0.35%
EPS Next 2Y1.07%
EPS Next 3Y-1.56%
EPS Next 5YN/A
Revenue 1Y (TTM)14.23%
Revenue growth 3Y13.47%
Revenue growth 5Y11.48%
Sales Q2Q%-4.49%
Revenue Next Year1.27%
Revenue Next 2Y2.88%
Revenue Next 3Y4.47%
Revenue Next 5YN/A
EBIT growth 1Y-6.48%
EBIT growth 3Y9.48%
EBIT growth 5Y12.18%
EBIT Next Year29.32%
EBIT Next 3Y8.88%
EBIT Next 5YN/A
FCF growth 1Y25.93%
FCF growth 3Y2.92%
FCF growth 5Y8.59%
OCF growth 1Y28.35%
OCF growth 3Y13.76%
OCF growth 5Y14.68%