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STERLING CHECK CORP (STER) Stock Fundamental Analysis

USA - NASDAQ:STER - US85917T1097 - Common Stock

16.74 USD
-0.04 (-0.24%)
Last: 10/30/2024, 8:00:00 PM
Fundamental Rating

3

STER gets a fundamental rating of 3 out of 10. The analysis compared the fundamentals against 82 industry peers in the Professional Services industry. Both the profitability and financial health of STER have multiple concerns. 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.
STER had a positive operating cash flow in the past year.
STER had negative earnings in 4 of the past 5 years.
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 has a worse Return On Assets (-1.04%) than 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.
STER has a worse Return On Invested Capital (2.06%) than 65.38% of its industry peers.
The Average Return On Invested Capital over the past 3 years for STER is significantly below the industry average of 13.18%.
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

STER has a Operating Margin (4.56%) which is comparable to the rest of the industry.
STER has a Gross Margin of 45.32%. This is comparable to the rest of the industry: STER outperforms 52.56% of its industry peers.
In the last couple of years the Gross Margin of STER has declined.
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

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so STER is destroying value.
Compared to 1 year ago, STER has less shares outstanding
Compared to 1 year ago, STER has a worse debt to assets ratio.
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.
The Debt to FCF ratio of STER (8.97) is worse than 60.26% of its industry peers.
A Debt/Equity ratio of 0.73 indicates that STER is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.73, STER is doing worse than 62.82% of the companies in the same industry.
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

STER has a Current Ratio of 1.62. This is a normal value and indicates that STER is financially healthy and should not expect problems in meeting its short term obligations.
STER has a Current ratio of 1.62. This is in the better half 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

STER shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -12.75%.
Looking at the last year, STER shows a decrease in Revenue. The Revenue has decreased by -0.32% in the last 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

STER is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 9.09% yearly.
STER is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.13% yearly.
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

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.
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 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

Based on the Price/Earnings ratio of 18.81, the valuation of STER can be described as rather expensive.
Compared to the rest of the industry, the Price/Earnings ratio of STER indicates a somewhat cheap valuation: STER is cheaper than 66.67% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.35, STER is valued a bit 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.
When comparing the Price/Forward Earnings ratio of STER to the average of the S&P500 Index (22.86), we can say STER is valued slightly cheaper.
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

STER'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 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 Change0%
Ins Owners0.47%
Ins Owner Change0%
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