INFORMATION SERVICES GROUP (III) Stock Fundamental Analysis
NASDAQ:III - Nasdaq - US45675Y1047 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to III. III was compared to 81 industry peers in the IT Services industry. Both the profitability and the financial health of III get a neutral evaluation. Nothing too spectacular is happening here. III is valued correctly, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
In the past year III was profitable.
III had a positive operating cash flow in the past year.
Each year in the past 5 years III has been profitable.
Each year in the past 5 years III had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 3.81%, III is in the better half of the industry, outperforming 60.49% of the companies in the same industry.
III has a Return On Equity (8.12%) which is comparable to the rest of the industry.
III's Return On Invested Capital of 4.35% is in line compared to the rest of the industry. III outperforms 55.56% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for III is significantly below the industry average of 21.85%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.81% | ||
| ROE | 8.12% | ||
| ROIC | 4.35% |
ROA(3y)3.99%
ROA(5y)3.94%
ROE(3y)9.53%
ROE(5y)9.44%
ROIC(3y)5.43%
ROIC(5y)5.93%
1.3 Margins
III has a Profit Margin of 3.18%. This is comparable to the rest of the industry: III outperforms 54.32% of its industry peers.
III's Profit Margin has declined in the last couple of years.
III's Operating Margin of 4.74% is in line compared to the rest of the industry. III outperforms 54.32% of its industry peers.
III's Operating Margin has declined in the last couple of years.
III has a better Gross Margin (41.05%) than 61.73% of its industry peers.
III's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.74% | ||
| PM (TTM) | 3.18% | ||
| GM | 41.05% |
OM growth 3Y-38.37%
OM growth 5Y-14.34%
PM growth 3Y-40.99%
PM growth 5Y-1.58%
GM growth 3Y-0.08%
GM growth 5Y-1.49%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so III is destroying value.
The number of shares outstanding for III has been reduced compared to 1 year ago.
Compared to 5 years ago, III has more shares outstanding
The debt/assets ratio for III has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 2.31 indicates that III is not a great score, but indicates only limited risk for bankruptcy at the moment.
The Altman-Z score of III (2.31) is comparable to the rest of the industry.
The Debt to FCF ratio of III is 3.73, which is a good value as it means it would take III, 3.73 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 3.73, III is doing good in the industry, outperforming 60.49% of the companies in the same industry.
III has a Debt/Equity ratio of 0.62. This is a neutral value indicating III is somewhat dependend on debt financing.
III's Debt to Equity ratio of 0.62 is in line compared to the rest of the industry. III outperforms 43.21% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.62 | ||
| Debt/FCF | 3.73 | ||
| Altman-Z | 2.31 |
ROIC/WACC0.48
WACC9%
2.3 Liquidity
III has a Current Ratio of 2.42. This indicates that III is financially healthy and has no problem in meeting its short term obligations.
III's Current ratio of 2.42 is fine compared to the rest of the industry. III outperforms 74.07% of its industry peers.
A Quick Ratio of 2.42 indicates that III has no problem at all paying its short term obligations.
III has a better Quick ratio (2.42) than 74.07% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.42 | ||
| Quick Ratio | 2.42 |
3. Growth
3.1 Past
III shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -10.34%.
Measured over the past years, III shows a decrease in Earnings Per Share. The EPS has been decreasing by -7.16% on average per year.
The Revenue for III has decreased by -12.26% in the past year. This is quite bad
III shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -1.41% yearly.
EPS 1Y (TTM)-10.34%
EPS 3Y-23.11%
EPS 5Y-7.16%
EPS Q2Q%600%
Revenue 1Y (TTM)-12.26%
Revenue growth 3Y-3.77%
Revenue growth 5Y-1.41%
Sales Q2Q%-7.29%
3.2 Future
III is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 31.03% yearly.
Based on estimates for the next years, III will show a small growth in Revenue. The Revenue will grow by 1.16% on average per year.
EPS Next Y43.42%
EPS Next 2Y31.03%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year-2.62%
Revenue Next 2Y1.16%
Revenue Next 3YN/A
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
III is valuated rather expensively with a Price/Earnings ratio of 19.19.
67.90% of the companies in the same industry are more expensive than III, based on the Price/Earnings ratio.
III's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.28.
With a Price/Forward Earnings ratio of 14.53, III is valued correctly.
Based on the Price/Forward Earnings ratio, III is valued a bit cheaper than the industry average as 76.54% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.76, III is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.19 | ||
| Fwd PE | 14.53 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, III is valued a bit cheaper than 62.96% of the companies in the same industry.
III's Price/Free Cash Flow ratio is rather cheap when compared to the industry. III is cheaper than 87.65% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.16 | ||
| EV/EBITDA | 15.9 |
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.
III's earnings are expected to grow with 31.03% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.44
PEG (5Y)N/A
EPS Next 2Y31.03%
EPS Next 3YN/A
5. Dividend
5.1 Amount
III has a Yearly Dividend Yield of 3.90%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 2.60, III pays a better dividend. On top of this III pays more dividend than 97.53% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.42, III pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.9% |
5.2 History
III has been paying a dividend for over 5 years, so it has already some track record.
III has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)N/A
Div Incr Years3
Div Non Decr Years3
5.3 Sustainability
119.76% of the earnings are spent on dividend by III. This is not a sustainable payout ratio.
DP119.76%
EPS Next 2Y31.03%
EPS Next 3YN/A
4.99
+0.19 (+3.96%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners61.41%
Inst Owner Change1.21%
Ins Owners15.94%
Ins Owner Change1.45%
Market Cap240.52M
Analysts85.71
Price Target5.99 (20.04%)
Short Float %0.73%
Short Ratio1.34
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.9% |
Yearly Dividend0.19
Dividend Growth(5Y)N/A
DP119.76%
Div Incr Years3
Div Non Decr Years3
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)17.16%
Min EPS beat(2)15.51%
Max EPS beat(2)18.81%
EPS beat(4)3
Avg EPS beat(4)16.68%
Min EPS beat(4)-11.6%
Max EPS beat(4)44.01%
EPS beat(8)5
Avg EPS beat(8)-3.81%
EPS beat(12)9
Avg EPS beat(12)7%
EPS beat(16)13
Avg EPS beat(16)17.89%
Revenue beat(2)1
Avg Revenue beat(2)0.03%
Min Revenue beat(2)-0.7%
Max Revenue beat(2)0.77%
Revenue beat(4)2
Avg Revenue beat(4)-0.63%
Min Revenue beat(4)-2.87%
Max Revenue beat(4)0.77%
Revenue beat(8)2
Avg Revenue beat(8)-1.97%
Revenue beat(12)4
Avg Revenue beat(12)-1.74%
Revenue beat(16)8
Avg Revenue beat(16)-0.31%
PT rev (1m)10.59%
PT rev (3m)10.59%
EPS NQ rev (1m)-2.86%
EPS NQ rev (3m)6.25%
EPS NY rev (1m)0.71%
EPS NY rev (3m)7.58%
Revenue NQ rev (1m)-0.53%
Revenue NQ rev (3m)-0.15%
Revenue NY rev (1m)-0.07%
Revenue NY rev (3m)-1.5%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.19 | ||
| Fwd PE | 14.53 | ||
| P/S | 0.99 | ||
| P/FCF | 15.16 | ||
| P/OCF | 12.99 | ||
| P/B | 2.53 | ||
| P/tB | 54.29 | ||
| EV/EBITDA | 15.9 |
EPS(TTM)0.26
EY5.21%
EPS(NY)0.34
Fwd EY6.88%
FCF(TTM)0.33
FCFY6.6%
OCF(TTM)0.38
OCFY7.7%
SpS5.04
BVpS1.97
TBVpS0.09
PEG (NY)0.44
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.81% | ||
| ROE | 8.12% | ||
| ROCE | 6.98% | ||
| ROIC | 4.35% | ||
| ROICexc | 4.95% | ||
| ROICexgc | 13.19% | ||
| OM | 4.74% | ||
| PM (TTM) | 3.18% | ||
| GM | 41.05% | ||
| FCFM | 6.53% |
ROA(3y)3.99%
ROA(5y)3.94%
ROE(3y)9.53%
ROE(5y)9.44%
ROIC(3y)5.43%
ROIC(5y)5.93%
ROICexc(3y)6.35%
ROICexc(5y)7.4%
ROICexgc(3y)18.57%
ROICexgc(5y)26.58%
ROCE(3y)8.72%
ROCE(5y)9.53%
ROICexcg growth 3Y-51.07%
ROICexcg growth 5Y-13.92%
ROICexc growth 3Y-42.19%
ROICexc growth 5Y-13.71%
OM growth 3Y-38.37%
OM growth 5Y-14.34%
PM growth 3Y-40.99%
PM growth 5Y-1.58%
GM growth 3Y-0.08%
GM growth 5Y-1.49%
F-Score9
Asset Turnover1.2
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.62 | ||
| Debt/FCF | 3.73 | ||
| Debt/EBITDA | 3.48 | ||
| Cap/Depr | 48.2% | ||
| Cap/Sales | 1.09% | ||
| Interest Coverage | 2.17 | ||
| Cash Conversion | 108.81% | ||
| Profit Quality | 205.61% | ||
| Current Ratio | 2.42 | ||
| Quick Ratio | 2.42 | ||
| Altman-Z | 2.31 |
F-Score9
WACC9%
ROIC/WACC0.48
Cap/Depr(3y)55.54%
Cap/Depr(5y)45.84%
Cap/Sales(3y)1.17%
Cap/Sales(5y)0.97%
Profit Quality(3y)260.97%
Profit Quality(5y)513.35%
High Growth Momentum
Growth
EPS 1Y (TTM)-10.34%
EPS 3Y-23.11%
EPS 5Y-7.16%
EPS Q2Q%600%
EPS Next Y43.42%
EPS Next 2Y31.03%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)-12.26%
Revenue growth 3Y-3.77%
Revenue growth 5Y-1.41%
Sales Q2Q%-7.29%
Revenue Next Year-2.62%
Revenue Next 2Y1.16%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y122.19%
EBIT growth 3Y-40.69%
EBIT growth 5Y-15.55%
EBIT Next Year338.83%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y1883.12%
FCF growth 3Y-24.52%
FCF growth 5Y-1.66%
OCF growth 1Y404.36%
OCF growth 3Y-22.05%
OCF growth 5Y-0.57%