SOLARWINDS CORP (SWI) Stock Fundamental Analysis
USA - NYSE:SWI - US83417Q2049 - Common Stock
18.49 USD
0 (0%)
18.4899 USD
0 (0%)
Taking everything into account, SWI scores 4 out of 10 in our fundamental rating. SWI was compared to 280 industry peers in the Software industry. SWI scores excellent on profitability, but there are concerns on its financial health. SWI has a valuation in line with the averages, but on the other hand it scores bad on growth.
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.
In the past 5 years SWI always reported a positive cash flow from operatings.
1.2 Ratios
SWI's Return On Assets of 3.53% is fine compared to the rest of the industry. SWI outperforms 72.18% of its industry peers.
With a decent Return On Equity value of 7.99%, SWI is doing good in the industry, outperforming 72.89% of the companies in the same industry.
With a decent Return On Invested Capital value of 6.11%, SWI is doing good in 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 11.85%.
The last Return On Invested Capital (6.11%) for SWI is above the 3 year average (4.19%), which is a sign of increasing profitability.
| 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's Operating Margin of 26.15% is amongst the best of the industry. SWI outperforms 92.61% of its industry peers.
SWI's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 89.55%, SWI belongs to the top of the industry, outperforming 97.54% of the companies in the same industry.
SWI's Gross Margin has improved in the last couple of years.
| 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.
SWI has more shares outstanding than it did 1 year ago.
The number of shares outstanding for SWI has been increased compared to 5 years ago.
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.
Looking at the Debt to FCF ratio, with a value of 7.19, SWI is in line with its industry, outperforming 53.87% of the companies in the same industry.
SWI has a Debt/Equity ratio of 0.85. This is a neutral value indicating SWI is somewhat dependend on debt financing.
SWI has a Debt to Equity ratio of 0.85. This is in the lower half of the industry: SWI underperforms 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.
SWI has a Quick Ratio of 0.85. This is a bad value and indicates that SWI is not financially healthy enough and could expect problems in meeting its short term obligations.
SWI has a Quick ratio of 0.85. This is amonst the worse of the industry: SWI underperforms 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.
The Earnings Per Share has been decreasing by -4.79% on average over the past years.
SWI shows a small growth in Revenue. In the last year, the Revenue has grown by 5.03%.
Measured over the past years, SWI shows a small growth in Revenue. The Revenue has been growing by 3.56% on average per year.
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
Based on estimates for the next years, SWI will show a decrease in Earnings Per Share. The EPS will decrease by -6.26% on average per year.
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.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 13.90, which indicates a correct valuation of SWI.
Based on the Price/Earnings ratio, SWI is valued cheaply inside the industry as 86.27% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 27.30. SWI is valued slightly cheaper when compared to this.
A Price/Forward Earnings ratio of 16.78 indicates a correct valuation of SWI.
83.10% of the companies in the same industry are more expensive than SWI, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 22.73. SWI is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.9 | ||
| Fwd PE | 16.78 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, SWI is valued cheaper than 85.56% of the companies in the same industry.
82.75% of the companies in the same industry are more expensive than SWI, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.91 | ||
| EV/EBITDA | 14.54 |
4.3 Compensation for Growth
The decent profitability rating of SWI 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 Change-99.49%
Ins Owners1.27%
Ins Owner Change-4.16%
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%