We assign a fundamental rating of 5 out of 10 to ZD. ZD was compared to 70 industry peers in the Interactive Media & Services industry. ZD has an excellent profitability rating, but there are some minor concerns on its financial health. ZD is valued quite cheap, but it does not seem to be growing. This makes ZD very considerable for value investing!

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year ZD was profitable.
ZD had a positive operating cash flow in the past year.
ZD had positive earnings in each of the past 5 years.
Each year in the past 5 years ZD had a positive operating cash flow.

1.2 Ratios

The Return On Assets of ZD (3.19%) is better than 70.00% of its industry peers.
ZD's Return On Equity of 6.17% is fine compared to the rest of the industry. ZD outperforms 72.86% of its industry peers.
ZD's Return On Invested Capital of 4.29% is fine compared to the rest of the industry. ZD outperforms 67.14% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for ZD is significantly below the industry average of 13.70%.
The last Return On Invested Capital (4.29%) for ZD is above the 3 year average (4.24%), which is a sign of increasing profitability.

		Industry Rank	Sector Rank
ROA	3.19%
ROE	6.17%
ROIC	4.29%

ROA(3y)1.57%

ROA(5y)4.39%

ROE(3y)3.01%

ROE(5y)9.34%

ROIC(3y)4.24%

ROIC(5y)3.97%

1.3 Margins

The Profit Margin of ZD (7.62%) is better than 74.29% of its industry peers.
In the last couple of years the Profit Margin of ZD has declined.
The Operating Margin of ZD (13.25%) is better than 77.14% of its industry peers.
In the last couple of years the Operating Margin of ZD has grown nicely.
The Gross Margin of ZD (86.50%) is better than 87.14% of its industry peers.
ZD's Gross Margin has been stable in the last couple of years.

		Industry Rank	Sector Rank
OM	13.25%
PM (TTM)	7.62%
GM	86.5%

OM growth 3Y-2.32%

OM growth 5Y11.07%

PM growth 3Y-49.55%

PM growth 5Y-26.37%

GM growth 3Y-0.39%

GM growth 5Y0.85%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

ZD has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for ZD has been reduced compared to 1 year ago.
The number of shares outstanding for ZD has been reduced compared to 5 years ago.
The debt/assets ratio for ZD has been reduced compared to a year ago.

2.2 Solvency

An Altman-Z score of 1.86 indicates that ZD is not a great score, but indicates only limited risk for bankruptcy at the moment.
The Altman-Z score of ZD (1.86) is better than 61.43% of its industry peers.
ZD has a debt to FCF ratio of 3.32. This is a good value and a sign of high solvency as ZD would need 3.32 years to pay back of all of its debts.
ZD has a Debt to FCF ratio of 3.32. This is in the better half of the industry: ZD outperforms 68.57% of its industry peers.
ZD has a Debt/Equity ratio of 0.48. This is a healthy value indicating a solid balance between debt and equity.
ZD's Debt to Equity ratio of 0.48 is on the low side compared to the rest of the industry. ZD is outperformed by 64.29% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	0.48
Debt/FCF	3.32
Altman-Z	1.86

ROIC/WACC0.69

WACC6.26%

2.3 Liquidity

ZD has a Current Ratio of 1.61. This is a normal value and indicates that ZD is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.61, ZD is in line with its industry, outperforming 41.43% of the companies in the same industry.
A Quick Ratio of 1.61 indicates that ZD should not have too much problems paying its short term obligations.
ZD has a Quick ratio of 1.61. This is comparable to the rest of the industry: ZD outperforms 41.43% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	1.61
Quick Ratio	1.61

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WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

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3. Growth

3.1 Past

The Earnings Per Share has been growing slightly by 4.67% over the past year.
Measured over the past years, ZD shows a decrease in Earnings Per Share. The EPS has been decreasing by -1.19% on average per year.
Looking at the last year, ZD shows a small growth in Revenue. The Revenue has grown by 5.70% in the last year.
ZD shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.94% yearly.

EPS 1Y (TTM)4.67%

EPS 3Y-9.84%

EPS 5Y-1.19%

EPS Q2Q%7.32%

Revenue 1Y (TTM)5.7%

Revenue growth 3Y-0.35%

Revenue growth 5Y5.94%

Sales Q2Q%2.87%

3.2 Future

Based on estimates for the next years, ZD will show a small growth in Earnings Per Share. The EPS will grow by 6.07% on average per year.
The Revenue is expected to grow by 3.22% on average over the next years.

EPS Next Y4.93%

EPS Next 2Y6.95%

EPS Next 3Y6.07%

EPS Next 5YN/A

Revenue Next Year3.37%

Revenue Next 2Y3.14%

Revenue Next 3Y3.22%

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.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

ZD is valuated cheaply with a Price/Earnings ratio of 5.88.
Based on the Price/Earnings ratio, ZD is valued cheaper than 91.43% of the companies in the same industry.
ZD's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 28.87.
With a Price/Forward Earnings ratio of 5.18, the valuation of ZD can be described as very cheap.
Based on the Price/Forward Earnings ratio, ZD is valued cheaper than 95.71% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 25.96. ZD is valued rather cheaply when compared to this.

		Industry Rank	Sector Rank
PE	5.88
Fwd PE	5.18

4.2 Price Multiples

ZD's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. ZD is cheaper than 90.00% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ZD indicates a rather cheap valuation: ZD is cheaper than 92.86% of the companies listed in the same industry.

		Industry Rank	Sector Rank
P/FCF	5.98
EV/EBITDA	4.55

4.3 Compensation for Growth

The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The decent profitability rating of ZD may justify a higher PE ratio.