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Micro Focus International plc (MFGP) Stock Fundamental Analysis

NYSE:MFGP - New York Stock Exchange, Inc. - US5948374039 - ADR - Currency: USD

6.48  -0.03 (-0.46%)

After market: 6.29 -0.19 (-2.93%)

Fundamental Rating

2

MFGP gets a fundamental rating of 2 out of 10. The analysis compared the fundamentals against 283 industry peers in the Software industry. MFGP has a bad profitability rating. Also its financial health evaluation is rather negative. MFGP has a bad growth rate and is valued cheaply.


Dividend Valuation Growth Profitability Health

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1

1. Profitability

1.1 Basic Checks

MFGP had positive earnings in the past year.
MFGP had a positive operating cash flow in the past year.
MFGP Yearly Net Income VS EBIT VS OCF VS FCFMFGP Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 0 1B -1B -2B

1.2 Ratios

The profitability ratios for MFGP are negative, so there is not much use analyzing them.
Industry RankSector Rank
ROA N/A
ROE N/A
ROIC N/A
ROA(3y)N/A
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
MFGP Yearly ROA, ROE, ROICMFGP Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 0 20 -20 -40 -60 -80

1.3 Margins

Looking at the Gross Margin, with a value of 73.32%, MFGP is in the better half of the industry, outperforming 68.23% of the companies in the same industry.
MFGP's Gross Margin has declined in the last couple of years.
MFGP does not have Profit Margin and Operating Margin available, so we won't be analyzing them here.
Industry RankSector Rank
OM N/A
PM (TTM) N/A
GM 73.32%
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-0.3%
GM growth 5Y-3.87%
MFGP Yearly Profit, Operating, Gross MarginsMFGP Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 0 50 -50

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1

2. Health

2.1 Basic Checks

MFGP does not have a ROIC to compare to the WACC, probably because it is not profitable.
The number of shares outstanding for MFGP has been increased compared to 1 year ago.
Compared to 1 year ago, MFGP has a worse debt to assets ratio.
MFGP Yearly Shares OutstandingMFGP Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 100M 200M 300M
MFGP Yearly Total Debt VS Total AssetsMFGP Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 5B 10B 15B

2.2 Solvency

Based on the Altman-Z score of 0.93, we must say that MFGP is in the distress zone and has some risk of bankruptcy.
MFGP's Altman-Z score of 0.93 is on the low side compared to the rest of the industry. MFGP is outperformed by 61.20% of its industry peers.
The Debt to FCF ratio of MFGP is 23.67, which is on the high side as it means it would take MFGP, 23.67 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 23.67, MFGP is in the better half of the industry, outperforming 61.54% of the companies in the same industry.
MFGP has a Debt/Equity ratio of 1.57. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of MFGP (1.57) is worse than 80.94% of its industry peers.
Industry RankSector Rank
Debt/Equity 1.57
Debt/FCF 23.67
Altman-Z 0.93
ROIC/WACCN/A
WACC7.83%
MFGP Yearly LT Debt VS Equity VS FCFMFGP Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2B 4B 6B

2.3 Liquidity

A Current Ratio of 0.85 indicates that MFGP may have some problems paying its short term obligations.
With a Current ratio value of 0.85, MFGP is not doing good in the industry: 83.28% of the companies in the same industry are doing better.
A Quick Ratio of 0.85 indicates that MFGP may have some problems paying its short term obligations.
The Quick ratio of MFGP (0.85) is worse than 81.94% of its industry peers.
Industry RankSector Rank
Current Ratio 0.85
Quick Ratio 0.85
MFGP Yearly Current Assets VS Current LiabilitesMFGP Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 1B 2B 3B

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2

3. Growth

3.1 Past

The earnings per share for MFGP have decreased by -5.84% in the last year.
The earnings per share for MFGP have been decreasing by -13.83% on average. This is quite bad
Looking at the last year, MFGP shows a decrease in Revenue. The Revenue has decreased by -3.37% in the last year.
MFGP shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 18.42% yearly.
EPS 1Y (TTM)-5.84%
EPS 3Y-13.83%
EPS 5YN/A
EPS Q2Q%-13.64%
Revenue 1Y (TTM)-3.37%
Revenue growth 3Y-15.19%
Revenue growth 5Y18.42%
Sales Q2Q%-10.95%

3.2 Future

Based on estimates for the next years, MFGP will show a decrease in Earnings Per Share. The EPS will decrease by -8.54% on average per year.
MFGP is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -5.58% yearly.
EPS Next Y-15.19%
EPS Next 2Y-13.56%
EPS Next 3Y-8.54%
EPS Next 5YN/A
Revenue Next Year-10.91%
Revenue Next 2Y-7.63%
Revenue Next 3Y-5.58%
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 decreasing.
MFGP Yearly Revenue VS EstimatesMFGP Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 1B 2B 3B 4B
MFGP Yearly EPS VS EstimatesMFGP Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0.5 1 1.5 2

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7

4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 4.63 indicates a rather cheap valuation of MFGP.
MFGP's Price/Earnings ratio is rather cheap when compared to the industry. MFGP is cheaper than 96.99% of the companies in the same industry.
MFGP's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 29.62.
Based on the Price/Forward Earnings ratio of 6.21, the valuation of MFGP can be described as very cheap.
Based on the Price/Forward Earnings ratio, MFGP is valued cheaply inside the industry as 98.33% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 22.70. MFGP is valued rather cheaply when compared to this.
Industry RankSector Rank
PE 4.63
Fwd PE 6.21
MFGP Price Earnings VS Forward Price EarningsMFGP Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30 40 50

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, MFGP is valued cheaper than 96.32% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, MFGP is valued cheaper than 95.32% of the companies in the same industry.
Industry RankSector Rank
P/FCF 12.25
EV/EBITDA 5.99
MFGP Per share dataMFGP EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 5 -5 -10

4.3 Compensation for Growth

MFGP's earnings are expected to decrease with -8.54% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-13.56%
EPS Next 3Y-8.54%

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5

5. Dividend

5.1 Amount

MFGP has a Yearly Dividend Yield of 4.09%, which is a nice return.
MFGP's Dividend Yield is rather good when compared to the industry average which is at 12.91. MFGP pays more dividend than 99.00% of the companies in the same industry.
MFGP's Dividend Yield is rather good when compared to the S&P500 average which is at 2.27.
Industry RankSector Rank
Dividend Yield 4.09%

5.2 History

MFGP has been paying a dividend for over 5 years, so it has already some track record.
The dividend of MFGP decreased recently.
Dividend Growth(5Y)N/A
Div Incr Years1
Div Non Decr Years1
MFGP Yearly Dividends per shareMFGP Yearly Dividends per shareYearly Dividends per share 2018 2019 2020 2021 2022 0.2 0.4 0.6 0.8 1

5.3 Sustainability

The earnings of MFGP are negative and hence is the payout ratio. MFGP will probably not be able to sustain this dividend level.
DP-22.27%
EPS Next 2Y-13.56%
EPS Next 3Y-8.54%
MFGP Yearly Income VS Free CF VS DividendMFGP Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 2016 2017 2018 2019 2020 2021 0 1B -1B -2B

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Micro Focus International plc

NYSE:MFGP (1/30/2023, 8:08:28 PM)

After market: 6.29 -0.19 (-2.93%)

6.48

-0.03 (-0.46%)

Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)02-06 2023-02-06/amc
Earnings (Next)06-20 2023-06-20/amc
Inst Owners0%
Inst Owner Change0%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap2.20B
Analysts75
Price Target6.01 (-7.25%)
Short Float %N/A
Short RatioN/A
Dividend
Industry RankSector Rank
Dividend Yield 4.09%
Yearly Dividend0.16
Dividend Growth(5Y)N/A
DP-22.27%
Div Incr Years1
Div Non Decr Years1
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)258.97%
Min EPS beat(2)258.97%
Max EPS beat(2)258.97%
EPS beat(4)2
Avg EPS beat(4)134.57%
Min EPS beat(4)10.17%
Max EPS beat(4)258.97%
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)0
Avg Revenue beat(2)-4.47%
Min Revenue beat(2)-4.47%
Max Revenue beat(2)-4.47%
Revenue beat(4)0
Avg Revenue beat(4)-2.36%
Min Revenue beat(4)-4.47%
Max Revenue beat(4)-0.26%
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)-3.49%
PT rev (3m)0.38%
EPS NQ rev (1m)N/A
EPS NQ rev (3m)N/A
EPS NY rev (1m)-0.04%
EPS NY rev (3m)-0.07%
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.02%
Valuation
Industry RankSector Rank
PE 4.63
Fwd PE 6.21
P/S 0.76
P/FCF 12.25
P/OCF 8.77
P/B 0.83
P/tB N/A
EV/EBITDA 5.99
EPS(TTM)1.4
EY21.6%
EPS(NY)1.04
Fwd EY16.11%
FCF(TTM)0.53
FCFY8.16%
OCF(TTM)0.74
OCFY11.4%
SpS8.55
BVpS7.82
TBVpS-14.34
PEG (NY)N/A
PEG (5Y)N/A
Profitability
Industry RankSector Rank
ROA N/A
ROE N/A
ROCE N/A
ROIC N/A
ROICexc N/A
ROICexgc N/A
OM N/A
PM (TTM) N/A
GM 73.32%
FCFM N/A
ROA(3y)N/A
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-0.3%
GM growth 5Y-3.87%
F-Score5
Asset Turnover0.32
Health
Industry RankSector Rank
Debt/Equity 1.57
Debt/FCF 23.67
Debt/EBITDA 4.34
Cap/Depr 7.2%
Cap/Sales N/A
Interest Coverage N/A
Cash Conversion N/A
Profit Quality N/A
Current Ratio 0.85
Quick Ratio 0.85
Altman-Z 0.93
F-Score5
WACC7.83%
ROIC/WACCN/A
Cap/Depr(3y)9.34%
Cap/Depr(5y)11.63%
Cap/Sales(3y)N/A
Cap/Sales(5y)N/A
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-5.84%
EPS 3Y-13.83%
EPS 5YN/A
EPS Q2Q%-13.64%
EPS Next Y-15.19%
EPS Next 2Y-13.56%
EPS Next 3Y-8.54%
EPS Next 5YN/A
Revenue 1Y (TTM)-3.37%
Revenue growth 3Y-15.19%
Revenue growth 5Y18.42%
Sales Q2Q%-10.95%
Revenue Next Year-10.91%
Revenue Next 2Y-7.63%
Revenue Next 3Y-5.58%
Revenue Next 5YN/A
EBIT growth 1Y-103.05%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year2.09%
EBIT Next 3Y0.45%
EBIT Next 5YN/A
FCF growth 1Y-63.54%
FCF growth 3Y-44.44%
FCF growth 5Y-10.81%
OCF growth 1Y-57.09%
OCF growth 3Y-39.85%
OCF growth 5Y-6.76%