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IAA INC (IAA) Stock Fundamental Analysis

USA - NYSE:IAA - US4492531037 - Common Stock

39.89 USD
-0.04 (-0.1%)
Last: 3/20/2023, 8:15:31 PM
40.1 USD
+0.21 (+0.53%)
After Hours: 3/20/2023, 8:15:31 PM
Fundamental Rating

6

We assign a fundamental rating of 6 out of 10 to IAA. IAA was compared to 84 industry peers in the Commercial Services & Supplies industry. While IAA has a great profitability rating, there are some minor concerns on its financial health. IAA has a correct valuation and a medium growth rate.


Dividend Valuation Growth Profitability Health

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9

1. Profitability

1.1 Basic Checks

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

The Return On Assets of IAA (8.69%) is better than 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 Return On Invested Capital of 10.86%. This is amongst the best in the industry. IAA outperforms 83.75% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for IAA is significantly above the industry average of 10.60%.
The last Return On Invested Capital (10.86%) for IAA is well below the 3 year average (20.07%), which needs to be investigated, but indicates that IAA had better years and this may not be a problem.
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.
With an excellent Operating Margin value of 19.87%, IAA belongs to the best of the industry, outperforming 96.25% of the companies in the same industry.
In the last couple of years the Operating Margin of IAA has remained more or less at the same level.
Looking at the Gross Margin, with a value of 35.00%, IAA is in the better half of the industry, outperforming 67.50% of the companies in the same industry.
IAA's Gross Margin has been stable in the last couple of years.
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.
IAA has less shares outstanding than it did 1 year ago.
The debt/assets ratio for IAA has been reduced compared to a year ago.
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.
With a decent Altman-Z score value of 2.57, IAA is doing good in 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.
IAA has a better Debt to FCF ratio (5.62) than 80.00% of its industry peers.
IAA has a Debt/Equity ratio of 1.95. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 1.95, IAA is doing worse than 83.75% of the companies in the same industry.
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

A Current Ratio of 1.75 indicates that IAA should not have too much problems paying its short term obligations.
IAA's Current ratio of 1.75 is fine compared to the rest of the industry. IAA outperforms 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.
With a decent Quick ratio value of 1.64, IAA is doing good in the industry, outperforming 73.75% of the companies in the same industry.
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

The earnings per share for IAA have decreased by -2.50% in the last year.
IAA shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 12.69% yearly.
The Revenue has grown by 14.23% in the past year. This is quite good.
Measured over the past years, IAA shows a quite strong growth in Revenue. The Revenue has been growing by 11.48% on average per year.
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.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
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.
71.25% of the companies in the same industry are more expensive than IAA, based on the Price/Earnings ratio.
IAA's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.27.
With a Price/Forward Earnings ratio of 16.99, IAA is valued correctly.
Based on the Price/Forward Earnings ratio, IAA is valued a bit cheaper than the industry average as 68.75% of the companies are valued more expensively.
IAA's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 22.77.
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 10 20 30 40 50

4.2 Price Multiples

The rest of the industry has a similar Enterprise Value to EBITDA ratio as IAA.
Based on the Price/Free Cash Flow ratio, IAA is valued a bit cheaper than the industry average as 75.00% of the companies are valued more expensively.
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%