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STERLING CHECK CORP (STER) Stock Fundamental Analysis

NASDAQ:STER - Nasdaq - US85917T1097 - Common Stock - Currency: USD

16.74  -0.04 (-0.24%)

Fundamental Rating

3

Overall STER gets a fundamental rating of 3 out of 10. We evaluated STER against 81 industry peers in the Professional Services industry. STER has a bad profitability rating. Also its financial health evaluation is rather negative. While showing a medium growth rate, STER is valued expensive at the moment.


Dividend Valuation Growth Profitability Health

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2

1. Profitability

1.1 Basic Checks

In the past year STER was profitable.
In the past year STER had a positive cash flow from operations.
In the past 5 years STER reported 4 times negative net income.
Each year in the past 5 years STER had a positive operating cash flow.
STER Yearly Net Income VS EBIT VS OCF VS FCFSTER Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2019 2020 2021 2022 2023 0 50M -50M 100M

1.2 Ratios

STER's Return On Assets of -1.04% is on the low side compared to the rest of the industry. STER is outperformed by 71.79% of its industry peers.
STER's Return On Equity of -2.07% is on the low side compared to the rest of the industry. STER is outperformed by 70.51% of its industry peers.
The Return On Invested Capital of STER (2.06%) is worse than 65.38% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for STER is significantly below the industry average of 13.71%.
Industry RankSector Rank
ROA -1.04%
ROE -2.07%
ROIC 2.06%
ROA(3y)0.01%
ROA(5y)-1.46%
ROE(3y)0%
ROE(5y)-3.28%
ROIC(3y)2.58%
ROIC(5y)N/A
STER Yearly ROA, ROE, ROICSTER Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2019 2020 2021 2022 2023 0 2 -2 -4 -6 -8

1.3 Margins

Looking at the Operating Margin, with a value of 4.56%, STER is in line with its industry, outperforming 44.87% of the companies in the same industry.
STER has a Gross Margin (45.32%) which is comparable to the rest of the industry.
STER's Gross Margin has declined in the last couple of years.
Industry RankSector Rank
OM 4.56%
PM (TTM) N/A
GM 45.32%
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-3.7%
GM growth 5YN/A
STER Yearly Profit, Operating, Gross MarginsSTER Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2019 2020 2021 2022 2023 0 20 40

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3

2. Health

2.1 Basic Checks

STER has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
STER has less shares outstanding than it did 1 year ago.
The debt/assets ratio for STER is higher compared to a year ago.
STER Yearly Shares OutstandingSTER Yearly Shares OutstandingYearly Shares Outstanding 2019 2020 2021 2022 2023 20M 40M 60M 80M
STER Yearly Total Debt VS Total AssetsSTER Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2019 2020 2021 2022 2023 500M 1B

2.2 Solvency

STER has an Altman-Z score of 1.82. This is not the best score and indicates that STER is in the grey zone with still only limited risk for bankruptcy at the moment.
The Altman-Z score of STER (1.82) is worse than 69.23% of its industry peers.
The Debt to FCF ratio of STER is 8.97, which is on the high side as it means it would take STER, 8.97 years of fcf income to pay off all of its debts.
STER's Debt to FCF ratio of 8.97 is on the low side compared to the rest of the industry. STER is outperformed by 60.26% of its industry peers.
STER has a Debt/Equity ratio of 0.73. This is a neutral value indicating STER is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.73, STER is not doing good in the industry: 62.82% of the companies in the same industry are doing better.
Industry RankSector Rank
Debt/Equity 0.73
Debt/FCF 8.97
Altman-Z 1.82
ROIC/WACC0.24
WACC8.51%
STER Yearly LT Debt VS Equity VS FCFSTER Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2019 2020 2021 2022 2023 200M 400M 600M

2.3 Liquidity

A Current Ratio of 1.62 indicates that STER should not have too much problems paying its short term obligations.
STER's Current ratio of 1.62 is fine compared to the rest of the industry. STER outperforms 61.54% of its industry peers.
A Quick Ratio of 1.62 indicates that STER should not have too much problems paying its short term obligations.
STER has a better Quick ratio (1.62) than 64.10% of its industry peers.
Industry RankSector Rank
Current Ratio 1.62
Quick Ratio 1.62
STER Yearly Current Assets VS Current LiabilitesSTER Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2019 2020 2021 2022 2023 50M 100M 150M 200M 250M

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4

3. Growth

3.1 Past

The earnings per share for STER have decreased strongly by -12.75% in the last year.
The Revenue has decreased by -0.32% in the past year.
STER shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 16.59% yearly.
EPS 1Y (TTM)-12.75%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%-17.86%
Revenue 1Y (TTM)-0.32%
Revenue growth 3Y16.59%
Revenue growth 5YN/A
Sales Q2Q%5.33%

3.2 Future

Based on estimates for the next years, STER will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.09% on average per year.
The Revenue is expected to grow by 8.13% on average over the next years. This is quite good.
EPS Next Y-8.3%
EPS Next 2Y5.97%
EPS Next 3Y9.09%
EPS Next 5YN/A
Revenue Next Year6.36%
Revenue Next 2Y7.66%
Revenue Next 3Y8.13%
Revenue Next 5YN/A

3.3 Evolution

The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
STER Yearly Revenue VS EstimatesSTER Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2019 2020 2021 2022 2023 2024 2025 2026 200M 400M 600M 800M
STER Yearly EPS VS EstimatesSTER Yearly EPS VS EstimatesYearly EPS VS Estimates 2019 2020 2021 2022 2023 2024 2025 2026 0.2 0.4 0.6 0.8 1

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3

4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 18.81 indicates a rather expensive valuation of STER.
66.67% of the companies in the same industry are more expensive than STER, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of STER to the average of the S&P500 Index (29.62), we can say STER is valued slightly cheaper.
With a Price/Forward Earnings ratio of 15.06, STER is valued correctly.
Based on the Price/Forward Earnings ratio, STER is valued a bit cheaper than 73.08% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 22.70. STER is valued slightly cheaper when compared to this.
Industry RankSector Rank
PE 18.81
Fwd PE 15.06
STER Price Earnings VS Forward Price EarningsSTER Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 5 10 15 20 25

4.2 Price Multiples

The rest of the industry has a similar Enterprise Value to EBITDA ratio as STER.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of STER is on the same level as its industry peers.
Industry RankSector Rank
P/FCF 26.62
EV/EBITDA 21.88
STER Per share dataSTER EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 2 -2 4 -4 6

4.3 Compensation for Growth

PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y5.97%
EPS Next 3Y9.09%

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0

5. Dividend

5.1 Amount

No dividends for STER!.
Industry RankSector Rank
Dividend Yield N/A

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STERLING CHECK CORP

NASDAQ:STER (10/30/2024, 8:00:00 PM)

16.74

-0.04 (-0.24%)

Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)11-08 2024-11-08/amc
Earnings (Next)N/A N/A
Inst Owners84.64%
Inst Owner Change-99.84%
Ins Owners0.47%
Ins Owner Change3.25%
Market Cap1.64B
Analysts52.31
Price Target16.83 (0.54%)
Short Float %N/A
Short RatioN/A
Dividend
Industry RankSector Rank
Dividend Yield N/A
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-22.66%
Min EPS beat(2)-29.87%
Max EPS beat(2)-15.44%
EPS beat(4)0
Avg EPS beat(4)-18.8%
Min EPS beat(4)-29.87%
Max EPS beat(4)-13.71%
EPS beat(8)2
Avg EPS beat(8)-11.35%
EPS beat(12)6
Avg EPS beat(12)0.84%
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)1
Avg Revenue beat(2)-0.46%
Min Revenue beat(2)-1.66%
Max Revenue beat(2)0.74%
Revenue beat(4)1
Avg Revenue beat(4)-3.29%
Min Revenue beat(4)-8.28%
Max Revenue beat(4)0.74%
Revenue beat(8)1
Avg Revenue beat(8)-2.85%
Revenue beat(12)5
Avg Revenue beat(12)1.14%
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)2.01%
PT rev (3m)2.01%
EPS NQ rev (1m)-11.11%
EPS NQ rev (3m)-18.42%
EPS NY rev (1m)-4.93%
EPS NY rev (3m)-11.63%
Revenue NQ rev (1m)-0.38%
Revenue NQ rev (3m)-1.31%
Revenue NY rev (1m)0.89%
Revenue NY rev (3m)-0.1%
Valuation
Industry RankSector Rank
PE 18.81
Fwd PE 15.06
P/S 2.23
P/FCF 26.62
P/OCF 19.5
P/B 2.23
P/tB N/A
EV/EBITDA 21.88
EPS(TTM)0.89
EY5.32%
EPS(NY)1.11
Fwd EY6.64%
FCF(TTM)0.63
FCFY3.76%
OCF(TTM)0.86
OCFY5.13%
SpS7.52
BVpS7.49
TBVpS-4.32
PEG (NY)N/A
PEG (5Y)N/A
Profitability
Industry RankSector Rank
ROA -1.04%
ROE -2.07%
ROCE 2.6%
ROIC 2.06%
ROICexc 2.18%
ROICexgc 44.9%
OM 4.56%
PM (TTM) N/A
GM 45.32%
FCFM 8.37%
ROA(3y)0.01%
ROA(5y)-1.46%
ROE(3y)0%
ROE(5y)-3.28%
ROIC(3y)2.58%
ROIC(5y)N/A
ROICexc(3y)2.75%
ROICexc(5y)N/A
ROICexgc(3y)51.21%
ROICexgc(5y)N/A
ROCE(3y)3.27%
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-3.7%
GM growth 5YN/A
F-Score3
Asset Turnover0.5
Health
Industry RankSector Rank
Debt/Equity 0.73
Debt/FCF 8.97
Debt/EBITDA 5.55
Cap/Depr 35.59%
Cap/Sales 3.06%
Interest Coverage 0.91
Cash Conversion 86.87%
Profit Quality N/A
Current Ratio 1.62
Quick Ratio 1.62
Altman-Z 1.82
F-Score3
WACC8.51%
ROIC/WACC0.24
Cap/Depr(3y)27.76%
Cap/Depr(5y)27.08%
Cap/Sales(3y)2.81%
Cap/Sales(5y)3.7%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-12.75%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%-17.86%
EPS Next Y-8.3%
EPS Next 2Y5.97%
EPS Next 3Y9.09%
EPS Next 5YN/A
Revenue 1Y (TTM)-0.32%
Revenue growth 3Y16.59%
Revenue growth 5YN/A
Sales Q2Q%5.33%
Revenue Next Year6.36%
Revenue Next 2Y7.66%
Revenue Next 3Y8.13%
Revenue Next 5YN/A
EBIT growth 1Y-27.27%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year23.82%
EBIT Next 3Y15.9%
EBIT Next 5YN/A
FCF growth 1Y71.64%
FCF growth 3Y57.18%
FCF growth 5YN/A
OCF growth 1Y48.64%
OCF growth 3Y38.83%
OCF growth 5YN/A