WALGREENS BOOTS ALLIANCE INC (WBA) Stock Fundamental Analysis
NASDAQ:WBA - Nasdaq - US9314271084 - Common Stock - Currency: USD
We assign a fundamental rating of 3 out of 10 to WBA. WBA was compared to 40 industry peers in the Consumer Staples Distribution & Retail industry. Both the profitability and financial health of WBA have multiple concerns. WBA has a bad growth rate and is valued cheaply.
1. Profitability
1.1 Basic Checks
WBA had positive earnings in the past year.
WBA had a positive operating cash flow in the past year.
In multiple years WBA reported negative net income over the last 5 years.
In the past 5 years WBA always reported a positive cash flow from operatings.
1.2 Ratios
WBA's Return On Assets of -8.23% is on the low side compared to the rest of the industry. WBA is outperformed by 80.00% of its industry peers.
Looking at the Return On Equity, with a value of -81.27%, WBA is doing worse than 90.00% of the companies in the same industry.
WBA's Return On Invested Capital of 6.64% is in line compared to the rest of the industry. WBA outperforms 57.50% of its industry peers.
The Average Return On Invested Capital over the past 3 years for WBA is below the industry average of 8.16%.
The 3 year average ROIC (3.98%) for WBA is below the current ROIC(6.64%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -8.23% | ||
| ROE | -81.27% | ||
| ROIC | 6.64% |
ROA(3y)-3.01%
ROA(5y)-1.08%
ROE(3y)-26.97%
ROE(5y)-13.57%
ROIC(3y)3.98%
ROIC(5y)4.68%
1.3 Margins
WBA has a Operating Margin (2.41%) which is comparable to the rest of the industry.
WBA's Operating Margin has declined in the last couple of years.
WBA has a Gross Margin of 17.39%. This is in the lower half of the industry: WBA underperforms 70.00% of its industry peers.
In the last couple of years the Gross Margin of WBA has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 2.41% | ||
| PM (TTM) | N/A | ||
| GM | 17.39% |
OM growth 3Y-19.96%
OM growth 5Y-19.55%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-5.34%
GM growth 5Y-5.19%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), WBA is destroying value.
Compared to 1 year ago, WBA has about the same amount of shares outstanding.
WBA has less shares outstanding than it did 5 years ago.
WBA has a worse debt/assets ratio than last year.
2.2 Solvency
WBA has an Altman-Z score of 2.65. This is not the best score and indicates that WBA is in the grey zone with still only limited risk for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 2.65, WBA is doing worse than 67.50% of the companies in the same industry.
WBA has a debt to FCF ratio of 15.71. This is a negative value and a sign of low solvency as WBA would need 15.71 years to pay back of all of its debts.
WBA has a Debt to FCF ratio of 15.71. This is in the lower half of the industry: WBA underperforms 60.00% of its industry peers.
WBA has a Debt/Equity ratio of 1.06. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of WBA (1.06) is worse than 65.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.06 | ||
| Debt/FCF | 15.71 | ||
| Altman-Z | 2.65 |
ROIC/WACC0.92
WACC7.21%
2.3 Liquidity
WBA has a Current Ratio of 0.61. This is a bad value and indicates that WBA is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Current ratio value of 0.61, WBA is not doing good in the industry: 90.00% of the companies in the same industry are doing better.
A Quick Ratio of 0.32 indicates that WBA may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.32, WBA is doing worse than 72.50% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.61 | ||
| Quick Ratio | 0.32 |
3. Growth
3.1 Past
The earnings per share for WBA have decreased strongly by -38.81% in the last year.
Measured over the past years, WBA shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -13.65% on average per year.
The Revenue has been growing slightly by 5.08% in the past year.
WBA shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.22% yearly.
EPS 1Y (TTM)-38.81%
EPS 3Y-16.96%
EPS 5Y-13.65%
EPS Q2Q%-47.5%
Revenue 1Y (TTM)5.08%
Revenue growth 3Y3.67%
Revenue growth 5Y4.22%
Sales Q2Q%4.15%
3.2 Future
WBA is expected to show a decrease in Earnings Per Share. In the coming years, the EPS will decrease by -4.88% yearly.
The Revenue is expected to grow by 2.54% on average over the next years.
EPS Next Y-43.65%
EPS Next 2Y-28.13%
EPS Next 3Y-16.48%
EPS Next 5Y-4.88%
Revenue Next Year4.18%
Revenue Next 2Y2.9%
Revenue Next 3Y2.88%
Revenue Next 5Y2.54%
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 decreasing.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 5.04, the valuation of WBA can be described as very cheap.
Based on the Price/Earnings ratio, WBA is valued cheaply inside the industry as 97.50% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 28.29. WBA is valued rather cheaply when compared to this.
WBA is valuated cheaply with a Price/Forward Earnings ratio of 7.32.
100.00% of the companies in the same industry are more expensive than WBA, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.08, WBA is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 5.04 | ||
| Fwd PE | 7.32 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of WBA indicates a rather cheap valuation: WBA is cheaper than 100.00% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, WBA is valued a bit cheaper than 80.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.46 | ||
| EV/EBITDA | 2.75 |
4.3 Compensation for Growth
WBA's earnings are expected to decrease with -16.48% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-28.13%
EPS Next 3Y-16.48%
5. Dividend
5.1 Amount
WBA has a Yearly Dividend Yield of 6.94%, which is a nice return.
Compared to an average industry Dividend Yield of 2.36, WBA pays a better dividend. On top of this WBA pays more dividend than 100.00% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.57, WBA pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.94% |
5.2 History
The dividend of WBA decreases each year by -3.89%.
WBA has paid a dividend for at least 10 years, which is a reliable track record.
WBA has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)-3.89%
Div Incr Years33
Div Non Decr Years33
5.3 Sustainability
The earnings of WBA are negative and hence is the payout ratio. WBA will probably not be able to sustain this dividend level.
The Dividend Rate of WBA has been decling, while earnings will also be declining. This means the current dividend is most likely not sustainable.
DP-14.95%
EPS Next 2Y-28.13%
EPS Next 3Y-16.48%
10.89
+0.09 (+0.83%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupConsumer Staples Distribution & Retail
GICS IndustryConsumer Staples Distribution & Retail
Earnings (Last)
Earnings (Next)
Inst Owners63.64%
Inst Owner Change0.27%
Ins Owners0.74%
Ins Owner Change26.47%
Market Cap9.42B
Analysts66
Price Target12.28 (12.76%)
Short Float %8.85%
Short Ratio2.25
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.94% |
Yearly Dividend1.46
Dividend Growth(5Y)-3.89%
DP-14.95%
Div Incr Years33
Div Non Decr Years33
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)26.77%
Min EPS beat(2)18.59%
Max EPS beat(2)34.95%
EPS beat(4)3
Avg EPS beat(4)13.33%
Min EPS beat(4)-8.17%
Max EPS beat(4)34.95%
EPS beat(8)5
Avg EPS beat(8)11.87%
EPS beat(12)9
Avg EPS beat(12)8.8%
EPS beat(16)13
Avg EPS beat(16)10.91%
Revenue beat(2)2
Avg Revenue beat(2)2.57%
Min Revenue beat(2)0.55%
Max Revenue beat(2)4.59%
Revenue beat(4)4
Avg Revenue beat(4)2.31%
Min Revenue beat(4)0.14%
Max Revenue beat(4)4.59%
Revenue beat(8)8
Avg Revenue beat(8)2.37%
Revenue beat(12)12
Avg Revenue beat(12)1.94%
Revenue beat(16)15
Avg Revenue beat(16)1.72%
PT rev (1m)6.57%
PT rev (3m)23.97%
EPS NQ rev (1m)-0.63%
EPS NQ rev (3m)-6.82%
EPS NY rev (1m)0%
EPS NY rev (3m)4.84%
Revenue NQ rev (1m)-0.12%
Revenue NQ rev (3m)0.37%
Revenue NY rev (1m)-0.13%
Revenue NY rev (3m)1.63%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 5.04 | ||
| Fwd PE | 7.32 | ||
| P/S | 0.06 | ||
| P/FCF | 16.46 | ||
| P/OCF | 5.89 | ||
| P/B | 1.32 | ||
| P/tB | N/A | ||
| EV/EBITDA | 2.75 |
EPS(TTM)2.16
EY19.83%
EPS(NY)1.49
Fwd EY13.66%
FCF(TTM)0.66
FCFY6.07%
OCF(TTM)1.85
OCFY16.97%
SpS175.71
BVpS8.22
TBVpS-17.82
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -8.23% | ||
| ROE | -81.27% | ||
| ROCE | 8.4% | ||
| ROIC | 6.64% | ||
| ROICexc | 6.82% | ||
| ROICexgc | 14.5% | ||
| OM | 2.41% | ||
| PM (TTM) | N/A | ||
| GM | 17.39% | ||
| FCFM | 0.38% |
ROA(3y)-3.01%
ROA(5y)-1.08%
ROE(3y)-26.97%
ROE(5y)-13.57%
ROIC(3y)3.98%
ROIC(5y)4.68%
ROICexc(3y)4.13%
ROICexc(5y)4.8%
ROICexgc(3y)9.14%
ROICexgc(5y)9.39%
ROCE(3y)5.04%
ROCE(5y)5.96%
ROICexcg growth 3Y-3.22%
ROICexcg growth 5Y-21.91%
ROICexc growth 3Y-13.35%
ROICexc growth 5Y-18.88%
OM growth 3Y-19.96%
OM growth 5Y-19.55%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-5.34%
GM growth 5Y-5.19%
F-Score4
Asset Turnover2.16
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.06 | ||
| Debt/FCF | 15.71 | ||
| Debt/EBITDA | 1.22 | ||
| Cap/Depr | 41.62% | ||
| Cap/Sales | 0.68% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 26.06% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.61 | ||
| Quick Ratio | 0.32 | ||
| Altman-Z | 2.65 |
F-Score4
WACC7.21%
ROIC/WACC0.92
Cap/Depr(3y)79.03%
Cap/Depr(5y)75.66%
Cap/Sales(3y)1.25%
Cap/Sales(5y)1.19%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-38.81%
EPS 3Y-16.96%
EPS 5Y-13.65%
EPS Q2Q%-47.5%
EPS Next Y-43.65%
EPS Next 2Y-28.13%
EPS Next 3Y-16.48%
EPS Next 5Y-4.88%
Revenue 1Y (TTM)5.08%
Revenue growth 3Y3.67%
Revenue growth 5Y4.22%
Sales Q2Q%4.15%
Revenue Next Year4.18%
Revenue Next 2Y2.9%
Revenue Next 3Y2.88%
Revenue Next 5Y2.54%
EBIT growth 1Y86.05%
EBIT growth 3Y-17.02%
EBIT growth 5Y-16.16%
EBIT Next Year20.65%
EBIT Next 3Y7.61%
EBIT Next 5Y27.82%
FCF growth 1Y-41.63%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-45.87%
OCF growth 3Y-43.2%
OCF growth 5Y-28.88%