Sierra Wireless Inc (SW.CA) Stock Fundamental Analysis
TSX:SW - Toronto Stock Exchange - CA8265161064 - Common Stock - Currency: CAD
SW gets a fundamental rating of 3 out of 10. The analysis compared the fundamentals against 11 industry peers in the Communications Equipment industry. SW scores quite bad on profitability, while its financial health is fine. Not spectacular, but in line with the averages. SW has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
SW had positive earnings in the past year.
In the past year SW has reported a negative cash flow from operations.
1.2 Ratios
The profitability ratios for SW are negative, so there is not much use analyzing them.
Looking at the Return On Invested Capital, with a value of 3.47%, SW is in the better half of the industry, outperforming 61.54% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | N/A | ||
| ROE | N/A | ||
| ROIC | 3.47% |
ROA(3y)N/A
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
SW's Operating Margin of 2.82% is fine compared to the rest of the industry. SW outperforms 61.54% of its industry peers.
SW's Gross Margin of 33.03% is on the low side compared to the rest of the industry. SW is outperformed by 69.23% of its industry peers.
SW's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 2.82% | ||
| PM (TTM) | N/A | ||
| GM | 33.03% |
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-0.21%
GM growth 5Y-1.28%
2. Health
2.1 Basic Checks
SW has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
SW has more shares outstanding than it did 1 year ago.
Compared to 1 year ago, SW has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 3.21 indicates that SW is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.21, SW is in the better half of the industry, outperforming 69.23% of the companies in the same industry.
A Debt/Equity ratio of 0.19 indicates that SW is not too dependend on debt financing.
The Debt to Equity ratio of SW (0.19) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.19 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 3.21 |
ROIC/WACC0.43
WACC8.09%
2.3 Liquidity
SW has a Current Ratio of 1.76. This is a normal value and indicates that SW is financially healthy and should not expect problems in meeting its short term obligations.
SW's Current ratio of 1.76 is in line compared to the rest of the industry. SW outperforms 53.85% of its industry peers.
SW has a Quick Ratio of 1.28. This is a normal value and indicates that SW is financially healthy and should not expect problems in meeting its short term obligations.
With a decent Quick ratio value of 1.28, SW is doing good in the industry, outperforming 69.23% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.76 | ||
| Quick Ratio | 1.28 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 190.38% over the past year.
SW shows a strong growth in Revenue. In the last year, the Revenue has grown by 52.51%.
The Revenue has been decreasing by -5.11% on average over the past years.
EPS 1Y (TTM)190.38%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%144.64%
Revenue 1Y (TTM)52.51%
Revenue growth 3Y-15.83%
Revenue growth 5Y-5.11%
Sales Q2Q%101.4%
3.2 Future
SW is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 41.72% yearly.
The Revenue is expected to grow by 19.94% on average over the next years. This is quite good.
EPS Next Y241.12%
EPS Next 2Y89.84%
EPS Next 3Y55.89%
EPS Next 5Y41.72%
Revenue Next Year52.17%
Revenue Next 2Y25.66%
Revenue Next 3Y23.26%
Revenue Next 5Y19.94%
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 accelerating.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 32.79, the valuation of SW can be described as expensive.
Compared to the rest of the industry, the Price/Earnings ratio of SW is on the same level as its industry peers.
When comparing the Price/Earnings ratio of SW to the average of the S&P500 Index (29.62), we can say SW is valued inline with the index average.
With a Price/Forward Earnings ratio of 23.39, SW is valued on the expensive side.
Based on the Price/Forward Earnings ratio, SW is valued a bit cheaper than 76.92% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 22.70. SW is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.79 | ||
| Fwd PE | 23.39 |
4.2 Price Multiples
SW's Enterprise Value to EBITDA is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 26.95 |
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.
SW's earnings are expected to grow with 55.89% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.14
PEG (5Y)N/A
EPS Next 2Y89.84%
EPS Next 3Y55.89%
5. Dividend
5.1 Amount
SW does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
TSX:SW (1/16/2023, 7:00:00 PM)
40.99
-0.33 (-0.8%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryCommunications Equipment
Earnings (Last)
Earnings (Next)
Inst Owners19.43%
Inst Owner ChangeN/A
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap1.60B
Analysts52.31
Price Target40.78 (-0.51%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr YearsN/A
Div Non Decr YearsN/A
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)4.76%
Min EPS beat(2)-41.64%
Max EPS beat(2)51.16%
EPS beat(4)3
Avg EPS beat(4)289.14%
Min EPS beat(4)-41.64%
Max EPS beat(4)1027.45%
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)-4.5%
Min Revenue beat(2)-14.03%
Max Revenue beat(2)5.04%
Revenue beat(4)3
Avg Revenue beat(4)6.43%
Min Revenue beat(4)-14.03%
Max Revenue beat(4)18.5%
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)0%
PT rev (3m)-2.43%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-32.59%
EPS NY rev (1m)0%
EPS NY rev (3m)-19.11%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-14.36%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-6.63%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.79 | ||
| Fwd PE | 23.39 | ||
| P/S | 1.78 | ||
| P/FCF | N/A | ||
| P/OCF | N/A | ||
| P/B | 4.37 | ||
| P/tB | 11.5 | ||
| EV/EBITDA | 26.95 |
EPS(TTM)1.25
EY3.05%
EPS(NY)1.75
Fwd EY4.28%
FCF(TTM)-1.35
FCFYN/A
OCF(TTM)-0.8
OCFYN/A
SpS23.09
BVpS9.37
TBVpS3.57
PEG (NY)0.14
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | N/A | ||
| ROE | N/A | ||
| ROCE | N/A | ||
| ROIC | 3.47% | ||
| ROICexc | 5.08% | ||
| ROICexgc | 13.66% | ||
| OM | 2.82% | ||
| PM (TTM) | N/A | ||
| GM | 33.03% | ||
| 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-0.21%
GM growth 5Y-1.28%
F-Score3
Asset Turnover1.12
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.19 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 1.62 | ||
| Cap/Depr | 69.86% | ||
| Cap/Sales | N/A | ||
| Interest Coverage | N/A | ||
| Cash Conversion | N/A | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.76 | ||
| Quick Ratio | 1.28 | ||
| Altman-Z | 3.21 |
F-Score3
WACC8.09%
ROIC/WACC0.43
Cap/Depr(3y)66.21%
Cap/Depr(5y)60.87%
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)190.38%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%144.64%
EPS Next Y241.12%
EPS Next 2Y89.84%
EPS Next 3Y55.89%
EPS Next 5Y41.72%
Revenue 1Y (TTM)52.51%
Revenue growth 3Y-15.83%
Revenue growth 5Y-5.11%
Sales Q2Q%101.4%
Revenue Next Year52.17%
Revenue Next 2Y25.66%
Revenue Next 3Y23.26%
Revenue Next 5Y19.94%
EBIT growth 1Y125.59%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year293.41%
EBIT Next 3Y99.31%
EBIT Next 5Y102.44%
FCF growth 1Y-14.99%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-59.99%
OCF growth 3YN/A
OCF growth 5YN/A