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. WBA has a bad profitability rating. Also its financial health evaluation is rather negative. WBA has a valuation in line with the averages, but on the other hand it scores bad on growth.
1. Profitability
1.1 Basic Checks
WBA had positive earnings in the past year.
In the past year WBA had a positive cash flow from operations.
The reported net income has been mixed in the past 5 years: WBA reported negative net income in multiple years.
Each year in the past 5 years WBA had a positive operating cash flow.
1.2 Ratios
With a Return On Assets value of -11.25%, WBA is not doing good in the industry: 82.05% of the companies in the same industry are doing better.
Looking at the Return On Equity, with a value of -88.88%, WBA is doing worse than 89.74% of the companies in the same industry.
WBA has a Return On Invested Capital (6.06%) which is comparable to the rest of the industry.
The Average Return On Invested Capital over the past 3 years for WBA is below the industry average of 8.42%.
The last Return On Invested Capital (6.06%) for WBA is above the 3 year average (3.98%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -11.25% | ||
| ROE | -88.88% | ||
| ROIC | 6.06% |
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's Operating Margin of 2.61% is in line compared to the rest of the industry. WBA outperforms 51.28% of its industry peers.
In the last couple of years the Operating Margin of WBA has declined.
Looking at the Gross Margin, with a value of 17.64%, WBA is doing worse than 71.79% of the companies in the same industry.
WBA's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 2.61% | ||
| PM (TTM) | N/A | ||
| GM | 17.64% |
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.
WBA has about the same amout of shares outstanding than it did 1 year ago.
The number of shares outstanding for WBA has been reduced compared to 5 years ago.
Compared to 1 year ago, WBA has a worse debt to assets ratio.
2.2 Solvency
WBA has an Altman-Z score of 2.42. 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 2.42, WBA is doing worse than 66.67% of the companies in the same industry.
A Debt/Equity ratio of 0.86 indicates that WBA is somewhat dependend on debt financing.
WBA has a worse Debt to Equity ratio (0.86) than 64.10% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.86 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 2.42 |
ROIC/WACC0.87
WACC6.94%
2.3 Liquidity
WBA has a Current Ratio of 0.64. This is a bad value and indicates that WBA is not financially healthy enough and could expect problems in meeting its short term obligations.
WBA's Current ratio of 0.64 is on the low side compared to the rest of the industry. WBA is outperformed by 89.74% of its industry peers.
A Quick Ratio of 0.30 indicates that WBA may have some problems paying its short term obligations.
WBA's Quick ratio of 0.30 is on the low side compared to the rest of the industry. WBA is outperformed by 71.79% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.64 | ||
| Quick Ratio | 0.3 |
3. Growth
3.1 Past
The earnings per share for WBA have decreased strongly by -21.78% 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.
WBA shows a small growth in Revenue. In the last year, the Revenue has grown by 5.62%.
The Revenue has been growing slightly by 4.22% on average over the past years.
EPS 1Y (TTM)-21.78%
EPS 3Y-16.96%
EPS 5Y-13.65%
EPS Q2Q%-22.73%
Revenue 1Y (TTM)5.62%
Revenue growth 3Y3.67%
Revenue growth 5Y4.22%
Sales Q2Q%7.5%
3.2 Future
WBA is expected to show a decrease in Earnings Per Share. In the coming years, the EPS will decrease by -4.17% yearly.
The Revenue is expected to grow by 2.54% on average over the next years.
EPS Next Y-43.65%
EPS Next 2Y-28.11%
EPS Next 3Y-16.38%
EPS Next 5Y-4.17%
Revenue Next Year4.52%
Revenue Next 2Y3.18%
Revenue Next 3Y2.77%
Revenue Next 5Y2.54%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
WBA is valuated cheaply with a Price/Earnings ratio of 4.04.
Based on the Price/Earnings ratio, WBA is valued cheaply inside the industry as 100.00% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 29.36. WBA is valued rather cheaply when compared to this.
Based on the Price/Forward Earnings ratio of 7.42, the valuation of WBA can be described as very cheap.
97.44% of the companies in the same industry are more expensive than WBA, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of WBA to the average of the S&P500 Index (22.65), we can say WBA is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 4.04 | ||
| Fwd PE | 7.42 |
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 97.44% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 2.72 |
4.3 Compensation for Growth
WBA's earnings are expected to decrease with -16.38% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-28.11%
EPS Next 3Y-16.38%
5. Dividend
5.1 Amount
WBA has a Yearly Dividend Yield of 7.38%, which is a nice return.
WBA's Dividend Yield is rather good when compared to the industry average which is at 2.38. WBA pays more dividend than 100.00% of the companies in the same industry.
WBA's Dividend Yield is rather good when compared to the S&P500 average which is at 2.27.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.38% |
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.
WBA's earnings and Dividend Rate are declining. This means the current dividend is most likely not sustainable.
DP-12.01%
EPS Next 2Y-28.11%
EPS Next 3Y-16.38%
11.04
-0.34 (-2.99%)
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 Change-92.67%
Ins Owners0.74%
Ins Owner Change26.64%
Market Cap9.54B
Analysts56.15
Price Target11.67 (5.71%)
Short Float %8.92%
Short Ratio2.41
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.38% |
Yearly Dividend1.46
Dividend Growth(5Y)-3.89%
DP-12.01%
Div Incr Years33
Div Non Decr Years33
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)21.45%
Min EPS beat(2)7.95%
Max EPS beat(2)34.95%
EPS beat(4)3
Avg EPS beat(4)20.06%
Min EPS beat(4)-8.17%
Max EPS beat(4)45.52%
EPS beat(8)5
Avg EPS beat(8)10.05%
EPS beat(12)9
Avg EPS beat(12)8.31%
EPS beat(16)13
Avg EPS beat(16)10.53%
Revenue beat(2)2
Avg Revenue beat(2)4.28%
Min Revenue beat(2)3.97%
Max Revenue beat(2)4.59%
Revenue beat(4)4
Avg Revenue beat(4)2.75%
Min Revenue beat(4)0.14%
Max Revenue beat(4)4.59%
Revenue beat(8)8
Avg Revenue beat(8)2.67%
Revenue beat(12)12
Avg Revenue beat(12)1.9%
Revenue beat(16)14
Avg Revenue beat(16)1.15%
PT rev (1m)17.8%
PT rev (3m)14.44%
EPS NQ rev (1m)1.95%
EPS NQ rev (3m)-38.5%
EPS NY rev (1m)4.84%
EPS NY rev (3m)0.96%
Revenue NQ rev (1m)1.33%
Revenue NQ rev (3m)0.4%
Revenue NY rev (1m)-0.01%
Revenue NY rev (3m)2.16%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 4.04 | ||
| Fwd PE | 7.42 | ||
| P/S | 0.06 | ||
| P/FCF | N/A | ||
| P/OCF | 8.24 | ||
| P/B | 0.96 | ||
| P/tB | N/A | ||
| EV/EBITDA | 2.72 |
EPS(TTM)2.73
EY24.73%
EPS(NY)1.49
Fwd EY13.48%
FCF(TTM)0
FCFYN/A
OCF(TTM)1.34
OCFY12.14%
SpS174.05
BVpS11.5
TBVpS-20.91
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -11.25% | ||
| ROE | -88.88% | ||
| ROCE | 7.67% | ||
| ROIC | 6.06% | ||
| ROICexc | 6.21% | ||
| ROICexgc | 14.15% | ||
| OM | 2.61% | ||
| PM (TTM) | N/A | ||
| GM | 17.64% | ||
| FCFM | N/A |
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 Turnover1.92
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.86 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 1.33 | ||
| Cap/Depr | 46.96% | ||
| Cap/Sales | 0.77% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 18.13% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.64 | ||
| Quick Ratio | 0.3 | ||
| Altman-Z | 2.42 |
F-Score4
WACC6.94%
ROIC/WACC0.87
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)-21.78%
EPS 3Y-16.96%
EPS 5Y-13.65%
EPS Q2Q%-22.73%
EPS Next Y-43.65%
EPS Next 2Y-28.11%
EPS Next 3Y-16.38%
EPS Next 5Y-4.17%
Revenue 1Y (TTM)5.62%
Revenue growth 3Y3.67%
Revenue growth 5Y4.22%
Sales Q2Q%7.5%
Revenue Next Year4.52%
Revenue Next 2Y3.18%
Revenue Next 3Y2.77%
Revenue Next 5Y2.54%
EBIT growth 1Y94.35%
EBIT growth 3Y-17.02%
EBIT growth 5Y-16.16%
EBIT Next Year20.42%
EBIT Next 3Y8.68%
EBIT Next 5Y27.82%
FCF growth 1Y-100.07%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-64.82%
OCF growth 3Y-43.2%
OCF growth 5Y-28.88%