SOLARWINDS CORP (SWI) Stock Fundamental Analysis
NYSE:SWI - New York Stock Exchange, Inc. - US83417Q2049 - Common Stock - Currency: USD
Overall SWI gets a fundamental rating of 4 out of 10. We evaluated SWI against 282 industry peers in the Software industry. While SWI has a great profitability rating, there are quite some concerns on its financial health. SWI is valued correctly, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
SWI had positive earnings in the past year.
SWI had a positive operating cash flow in the past year.
The reported net income has been mixed in the past 5 years: SWI reported negative net income in multiple years.
Each year in the past 5 years SWI had a positive operating cash flow.
1.2 Ratios
SWI has a Return On Assets of 3.53%. This is in the better half of the industry: SWI outperforms 72.18% of its industry peers.
Looking at the Return On Equity, with a value of 7.99%, SWI is in the better half of the industry, outperforming 72.89% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 6.11%, SWI is in the better half of the industry, outperforming 77.46% of the companies in the same industry.
SWI had an Average Return On Invested Capital over the past 3 years of 4.19%. This is significantly below the industry average of 12.28%.
The 3 year average ROIC (4.19%) for SWI is below the current ROIC(6.11%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.53% | ||
| ROE | 7.99% | ||
| ROIC | 6.11% |
ROA(3y)-8.6%
ROA(5y)-4.82%
ROE(3y)-20.17%
ROE(5y)-11.5%
ROIC(3y)4.19%
ROIC(5y)N/A
1.3 Margins
With a decent Profit Margin value of 14.04%, SWI is doing good in the industry, outperforming 78.52% of the companies in the same industry.
SWI's Profit Margin has improved in the last couple of years.
SWI has a Operating Margin of 26.15%. This is amongst the best in the industry. SWI outperforms 92.61% of its industry peers.
SWI's Operating Margin has improved in the last couple of years.
The Gross Margin of SWI (89.55%) is better than 97.54% of its industry peers.
In the last couple of years the Gross Margin of SWI has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 26.15% | ||
| PM (TTM) | 14.04% | ||
| GM | 89.55% |
OM growth 3YN/A
OM growth 5Y16.98%
PM growth 3YN/A
PM growth 5Y38.56%
GM growth 3Y9.39%
GM growth 5Y4.93%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so SWI is destroying value.
The number of shares outstanding for SWI has been increased compared to 1 year ago.
Compared to 5 years ago, SWI has more shares outstanding
The debt/assets ratio for SWI is higher compared to a year ago.
2.2 Solvency
SWI has an Altman-Z score of 1.03. This is a bad value and indicates that SWI is not financially healthy and even has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 1.03, SWI is in line with its industry, outperforming 40.14% of the companies in the same industry.
The Debt to FCF ratio of SWI is 7.19, which is on the high side as it means it would take SWI, 7.19 years of fcf income to pay off all of its debts.
SWI has a Debt to FCF ratio of 7.19. This is comparable to the rest of the industry: SWI outperforms 53.87% of its industry peers.
A Debt/Equity ratio of 0.85 indicates that SWI is somewhat dependend on debt financing.
SWI's Debt to Equity ratio of 0.85 is on the low side compared to the rest of the industry. SWI is outperformed by 72.18% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.85 | ||
| Debt/FCF | 7.19 | ||
| Altman-Z | 1.03 |
ROIC/WACC0.54
WACC11.32%
2.3 Liquidity
A Current Ratio of 0.85 indicates that SWI may have some problems paying its short term obligations.
Looking at the Current ratio, with a value of 0.85, SWI is doing worse than 80.99% of the companies in the same industry.
A Quick Ratio of 0.85 indicates that SWI may have some problems paying its short term obligations.
SWI has a worse Quick ratio (0.85) than 80.63% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.85 | ||
| Quick Ratio | 0.85 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 51.14% over the past year.
SWI shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -4.79% yearly.
Looking at the last year, SWI shows a small growth in Revenue. The Revenue has grown by 5.03% in the last year.
The Revenue has been growing slightly by 3.56% on average over the past years.
EPS 1Y (TTM)51.14%
EPS 3Y-5.38%
EPS 5Y-4.79%
EPS Q2Q%112.5%
Revenue 1Y (TTM)5.03%
Revenue growth 3Y3.51%
Revenue growth 5Y3.56%
Sales Q2Q%6.14%
3.2 Future
The Earnings Per Share is expected to decrease by -6.26% on average over the next years.
Based on estimates for the next years, SWI will show a small growth in Revenue. The Revenue will grow by 4.00% on average per year.
EPS Next Y-17.13%
EPS Next 2Y-6.26%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year3.5%
Revenue Next 2Y4%
Revenue Next 3YN/A
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
SWI is valuated correctly with a Price/Earnings ratio of 13.90.
Compared to the rest of the industry, the Price/Earnings ratio of SWI indicates a rather cheap valuation: SWI is cheaper than 86.27% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 27.30. SWI is valued slightly cheaper when compared to this.
With a Price/Forward Earnings ratio of 16.78, SWI is valued correctly.
Based on the Price/Forward Earnings ratio, SWI is valued cheaper than 83.10% of the companies in the same industry.
SWI's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 21.76.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.9 | ||
| Fwd PE | 16.78 |
4.2 Price Multiples
85.56% of the companies in the same industry are more expensive than SWI, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, SWI is valued cheaper than 82.75% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.91 | ||
| EV/EBITDA | 14.54 |
4.3 Compensation for Growth
SWI has a very decent profitability rating, which may justify a higher PE ratio.
A cheap valuation may be justified as SWI's earnings are expected to decrease with -6.26% in the coming years.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-6.26%
EPS Next 3YN/A
5. Dividend
5.1 Amount
SWI does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
18.49
0 (0%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners31.68%
Inst Owner Change0%
Ins Owners1.27%
Ins Owner Change-3.77%
Market Cap3.17B
Analysts51.43
Price Target17.49 (-5.41%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly Dividend0.99
Dividend Growth(5Y)N/A
DP150.27%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)46.74%
Min EPS beat(2)8.17%
Max EPS beat(2)85.3%
EPS beat(4)4
Avg EPS beat(4)34.6%
Min EPS beat(4)8.17%
Max EPS beat(4)85.3%
EPS beat(8)8
Avg EPS beat(8)27.79%
EPS beat(12)10
Avg EPS beat(12)18.98%
EPS beat(16)14
Avg EPS beat(16)18.3%
Revenue beat(2)2
Avg Revenue beat(2)2.33%
Min Revenue beat(2)2.07%
Max Revenue beat(2)2.6%
Revenue beat(4)4
Avg Revenue beat(4)1.59%
Min Revenue beat(4)0.29%
Max Revenue beat(4)2.6%
Revenue beat(8)8
Avg Revenue beat(8)2.03%
Revenue beat(12)10
Avg Revenue beat(12)1.35%
Revenue beat(16)12
Avg Revenue beat(16)-2.87%
PT rev (1m)0%
PT rev (3m)17.72%
EPS NQ rev (1m)0%
EPS NQ rev (3m)3.92%
EPS NY rev (1m)0%
EPS NY rev (3m)2.12%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.44%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.45%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.9 | ||
| Fwd PE | 16.78 | ||
| P/S | 3.98 | ||
| P/FCF | 18.91 | ||
| P/OCF | 16.85 | ||
| P/B | 2.27 | ||
| P/tB | N/A | ||
| EV/EBITDA | 14.54 |
EPS(TTM)1.33
EY7.19%
EPS(NY)1.1
Fwd EY5.96%
FCF(TTM)0.98
FCFY5.29%
OCF(TTM)1.1
OCFY5.93%
SpS4.64
BVpS8.16
TBVpS-6.36
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.53% | ||
| ROE | 7.99% | ||
| ROCE | 7.74% | ||
| ROIC | 6.11% | ||
| ROICexc | 6.77% | ||
| ROICexgc | N/A | ||
| OM | 26.15% | ||
| PM (TTM) | 14.04% | ||
| GM | 89.55% | ||
| FCFM | 21.06% |
ROA(3y)-8.6%
ROA(5y)-4.82%
ROE(3y)-20.17%
ROE(5y)-11.5%
ROIC(3y)4.19%
ROIC(5y)N/A
ROICexc(3y)4.61%
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)5.3%
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5Y38.26%
OM growth 3YN/A
OM growth 5Y16.98%
PM growth 3YN/A
PM growth 5Y38.56%
GM growth 3Y9.39%
GM growth 5Y4.93%
F-Score7
Asset Turnover0.25
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.85 | ||
| Debt/FCF | 7.19 | ||
| Debt/EBITDA | 4.22 | ||
| Cap/Depr | 27.54% | ||
| Cap/Sales | 2.57% | ||
| Interest Coverage | 1.99 | ||
| Cash Conversion | 66.59% | ||
| Profit Quality | 149.97% | ||
| Current Ratio | 0.85 | ||
| Quick Ratio | 0.85 | ||
| Altman-Z | 1.03 |
F-Score7
WACC11.32%
ROIC/WACC0.54
Cap/Depr(3y)23.89%
Cap/Depr(5y)17.54%
Cap/Sales(3y)2.62%
Cap/Sales(5y)2.58%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)51.14%
EPS 3Y-5.38%
EPS 5Y-4.79%
EPS Q2Q%112.5%
EPS Next Y-17.13%
EPS Next 2Y-6.26%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)5.03%
Revenue growth 3Y3.51%
Revenue growth 5Y3.56%
Sales Q2Q%6.14%
Revenue Next Year3.5%
Revenue Next 2Y4%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y38.7%
EBIT growth 3YN/A
EBIT growth 5Y21.14%
EBIT Next Year9%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y1.59%
FCF growth 3Y5.65%
FCF growth 5Y-10.12%
OCF growth 1Y2.63%
OCF growth 3Y6.43%
OCF growth 5Y-8.95%