SOLARWINDS CORP (SWI) Stock Fundamental Analysis
NYSE:SWI - New York Stock Exchange, Inc. - US83417Q2049 - Common Stock - Currency: USD
SWI gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 284 industry peers in the Software industry. While SWI is still in line with the averages on profitability rating, there are concerns on its financial health. SWI is valued quite cheap, while showing a decent growth score. This is a good combination!
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 better Return On Assets (1.24%) than 64.62% of its industry peers.
SWI's Return On Equity of 2.83% is fine compared to the rest of the industry. SWI outperforms 68.23% of its industry peers.
SWI has a better Return On Invested Capital (5.68%) than 76.53% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.24% | ||
| ROE | 2.83% | ||
| ROIC | 5.68% |
ROA(3y)-10.13%
ROA(5y)-5.46%
ROE(3y)-23.58%
ROE(5y)-12.96%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
Looking at the Profit Margin, with a value of 4.93%, SWI is in the better half of the industry, outperforming 69.31% of the companies in the same industry.
SWI's Operating Margin of 24.40% is amongst the best of the industry. SWI outperforms 91.34% of its industry peers.
In the last couple of years the Operating Margin of SWI has grown nicely.
The Gross Margin of SWI (89.30%) is better than 95.67% of its industry peers.
In the last couple of years the Gross Margin of SWI has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 24.4% | ||
| PM (TTM) | 4.93% | ||
| GM | 89.3% |
OM growth 3Y30.11%
OM growth 5Y7.46%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y7.89%
GM growth 5Y4.69%
2. Health
2.1 Basic Checks
SWI has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
SWI has more shares outstanding than it did 1 year ago.
SWI has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, SWI has an improved debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 0.75, we must say that SWI is in the distress zone and has some risk of bankruptcy.
With a Altman-Z score value of 0.75, SWI is not doing good in the industry: 68.59% of the companies in the same industry are doing better.
SWI has a debt to FCF ratio of 7.51. This is a slightly negative value and a sign of low solvency as SWI would need 7.51 years to pay back of all of its debts.
SWI's Debt to FCF ratio of 7.51 is in line compared to the rest of the industry. SWI outperforms 51.99% of its industry peers.
A Debt/Equity ratio of 0.88 indicates that SWI is somewhat dependend on debt financing.
SWI has a worse Debt to Equity ratio (0.88) than 75.45% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.88 | ||
| Debt/FCF | 7.51 | ||
| Altman-Z | 0.75 |
ROIC/WACC0.5
WACC11.41%
2.3 Liquidity
A Current Ratio of 0.71 indicates that SWI may have some problems paying its short term obligations.
SWI's Current ratio of 0.71 is on the low side compared to the rest of the industry. SWI is outperformed by 86.28% of its industry peers.
SWI has a Quick Ratio of 0.71. This is a bad value and indicates that SWI is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.71, SWI is doing worse than 85.20% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.71 | ||
| Quick Ratio | 0.71 |
3. Growth
3.1 Past
SWI shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 27.71%, which is quite impressive.
SWI shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -23.69% yearly.
SWI shows a small growth in Revenue. In the last year, the Revenue has grown by 4.95%.
The Revenue has been decreasing by -1.85% on average over the past years.
EPS 1Y (TTM)27.71%
EPS 3Y-23.69%
EPS 5YN/A
EPS Q2Q%17.39%
Revenue 1Y (TTM)4.95%
Revenue growth 3Y1.91%
Revenue growth 5Y-1.85%
Sales Q2Q%5.5%
3.2 Future
Based on estimates for the next years, SWI will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.89% on average per year.
SWI is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.14% yearly.
EPS Next Y25.25%
EPS Next 2Y10.95%
EPS Next 3Y8.89%
EPS Next 5YN/A
Revenue Next Year5.23%
Revenue Next 2Y4.13%
Revenue Next 3Y4.14%
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
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 17.27, the valuation of SWI can be described as rather expensive.
Based on the Price/Earnings ratio, SWI is valued cheaper than 88.81% of the companies in the same industry.
When comparing the Price/Earnings ratio of SWI to the average of the S&P500 Index (28.12), we can say SWI is valued slightly cheaper.
With a Price/Forward Earnings ratio of 16.90, SWI is valued correctly.
SWI's Price/Forward Earnings ratio is rather cheap when compared to the industry. SWI is cheaper than 90.97% of the companies in the same industry.
SWI's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 94.77.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.27 | ||
| Fwd PE | 16.9 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, SWI is valued cheaply inside the industry as 89.89% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, SWI is valued cheaper than 90.97% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.47 | ||
| EV/EBITDA | 13.35 |
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.
The decent profitability rating of SWI may justify a higher PE ratio.
PEG (NY)0.68
PEG (5Y)N/A
EPS Next 2Y10.95%
EPS Next 3Y8.89%
5. Dividend
5.1 Amount
SWI has a Yearly Dividend Yield of 6.72%, which is a nice return.
SWI's Dividend Yield is rather good when compared to the industry average which is at 11.93. SWI pays more dividend than 98.56% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.29, SWI pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.72% |
5.2 History
SWI is new to the dividend game and has less than 3 years of track record.
Dividend Growth(5Y)N/A
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
SWI pays out 435.01% of its income as dividend. This is not a sustainable payout ratio.
DP435.01%
EPS Next 2Y10.95%
EPS Next 3Y8.89%
SOLARWINDS CORP
NYSE:SWI (2/7/2025, 8:04:00 PM)
After market: 18.33 +0.02 (+0.11%)18.31
+3.28 (+21.82%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners27.87%
Inst Owner Change0.29%
Ins Owners1.61%
Ins Owner Change-0.73%
Market Cap3.12B
Analysts53.33
Price Target15.11 (-17.48%)
Short Float %3.67%
Short Ratio3.74
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.72% |
Yearly Dividend0
Dividend Growth(5Y)N/A
DP435.01%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)10.87%
Min EPS beat(2)8.17%
Max EPS beat(2)13.57%
EPS beat(4)4
Avg EPS beat(4)16.56%
Min EPS beat(4)8.17%
Max EPS beat(4)31.37%
EPS beat(8)7
Avg EPS beat(8)16.1%
EPS beat(12)10
Avg EPS beat(12)13.11%
EPS beat(16)14
Avg EPS beat(16)13.26%
Revenue beat(2)2
Avg Revenue beat(2)1.74%
Min Revenue beat(2)1.42%
Max Revenue beat(2)2.07%
Revenue beat(4)4
Avg Revenue beat(4)1.7%
Min Revenue beat(4)0.29%
Max Revenue beat(4)3.01%
Revenue beat(8)8
Avg Revenue beat(8)2.06%
Revenue beat(12)10
Avg Revenue beat(12)1.27%
Revenue beat(16)11
Avg Revenue beat(16)-4.86%
PT rev (1m)1.72%
PT rev (3m)1.76%
EPS NQ rev (1m)0.39%
EPS NQ rev (3m)4.81%
EPS NY rev (1m)-0.02%
EPS NY rev (3m)2.79%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.01%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.73%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.27 | ||
| Fwd PE | 16.9 | ||
| P/S | 3.98 | ||
| P/FCF | 19.47 | ||
| P/OCF | 17.28 | ||
| P/B | 2.29 | ||
| P/tB | N/A | ||
| EV/EBITDA | 13.35 |
EPS(TTM)1.06
EY5.79%
EPS(NY)1.08
Fwd EY5.92%
FCF(TTM)0.94
FCFY5.14%
OCF(TTM)1.06
OCFY5.79%
SpS4.6
BVpS8
TBVpS-6.95
PEG (NY)0.68
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.24% | ||
| ROE | 2.83% | ||
| ROCE | 7.19% | ||
| ROIC | 5.68% | ||
| ROICexc | 6.14% | ||
| ROICexgc | N/A | ||
| OM | 24.4% | ||
| PM (TTM) | 4.93% | ||
| GM | 89.3% | ||
| FCFM | 20.44% |
ROA(3y)-10.13%
ROA(5y)-5.46%
ROE(3y)-23.58%
ROE(5y)-12.96%
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 3Y65.52%
ROICexc growth 5Y18.4%
OM growth 3Y30.11%
OM growth 5Y7.46%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y7.89%
GM growth 5Y4.69%
F-Score7
Asset Turnover0.25
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.88 | ||
| Debt/FCF | 7.51 | ||
| Debt/EBITDA | 4.48 | ||
| Cap/Depr | 27.03% | ||
| Cap/Sales | 2.6% | ||
| Interest Coverage | 1.75 | ||
| Cash Conversion | 67.74% | ||
| Profit Quality | 414.93% | ||
| Current Ratio | 0.71 | ||
| Quick Ratio | 0.71 | ||
| Altman-Z | 0.75 |
F-Score7
WACC11.41%
ROIC/WACC0.5
Cap/Depr(3y)16.72%
Cap/Depr(5y)13.44%
Cap/Sales(3y)2.41%
Cap/Sales(5y)2.51%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)27.71%
EPS 3Y-23.69%
EPS 5YN/A
EPS Q2Q%17.39%
EPS Next Y25.25%
EPS Next 2Y10.95%
EPS Next 3Y8.89%
EPS Next 5YN/A
Revenue 1Y (TTM)4.95%
Revenue growth 3Y1.91%
Revenue growth 5Y-1.85%
Sales Q2Q%5.5%
Revenue Next Year5.23%
Revenue Next 2Y4.13%
Revenue Next 3Y4.14%
Revenue Next 5YN/A
EBIT growth 1Y37.63%
EBIT growth 3Y32.6%
EBIT growth 5Y5.47%
EBIT Next Year29.38%
EBIT Next 3Y10.23%
EBIT Next 5YN/A
FCF growth 1Y31.26%
FCF growth 3Y-23.45%
FCF growth 5Y-6.85%
OCF growth 1Y26.6%
OCF growth 3Y-22.25%
OCF growth 5Y-6.31%