Stock Analysis: Affordable Growth

Fundamental Rating

Overall GCT gets a fundamental rating of 7 out of 10. We evaluated GCT against 14 industry peers in the Distributors industry. While GCT belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. GCT is growing strongly while it also seems undervalued. This is an interesting combination These ratings would make GCT suitable for value and growth investing!

1. Profitability

1.1 Basic Checks

In the past year GCT was profitable.

GCT had a positive operating cash flow in the past year.

In the past 5 years GCT has always been profitable.

In the past 5 years GCT always reported a positive cash flow from operatings.

1.2 Ratios

The Return On Assets of GCT (10.78%) is better than 84.62% of its industry peers.

GCT's Return On Equity of 33.16% is amongst the best of the industry. GCT outperforms 84.62% of its industry peers.

With an excellent Return On Invested Capital value of 14.25%, GCT belongs to the best of the industry, outperforming 84.62% of the companies in the same industry.

The Average Return On Invested Capital over the past 3 years for GCT is above the industry average of 13.40%.

		Industry Rank	Sector Rank
ROA	10.78%
ROE	33.16%
ROIC	14.25%

ROA(3y)6.48%

ROA(5y)6.94%

ROE(3y)15.7%

ROE(5y)14.55%

ROIC(3y)15.64%

ROIC(5y)20.04%

1.3 Margins

With an excellent Profit Margin value of 12.74%, GCT belongs to the best of the industry, outperforming 92.31% of the companies in the same industry.

In the last couple of years the Profit Margin of GCT has grown nicely.

GCT has a better Operating Margin (15.75%) than 92.31% of its industry peers.

GCT's Operating Margin has been stable in the last couple of years.

The Gross Margin of GCT (27.28%) is comparable to the rest of the industry.

In the last couple of years the Gross Margin of GCT has remained more or less at the same level.

		Industry Rank	Sector Rank
OM	15.75%
PM (TTM)	12.74%
GM	27.28%

OM growth 3Y0.12%

OM growth 5YN/A

PM growth 3Y41.51%

PM growth 5YN/A

GM growth 3Y-0.56%

GM growth 5YN/A

More info and screens

ROA

ROE

ROIC

Operating and Profit Margin

Show most profitable peers

2. Health

2.1 Basic Checks

GCT has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.

The number of shares outstanding for GCT has been increased compared to 1 year ago.

Compared to 1 year ago, GCT has an improved debt to assets ratio.

2.2 Solvency

An Altman-Z score of 2.83 indicates that GCT is not a great score, but indicates only limited risk for bankruptcy at the moment.

GCT's Altman-Z score of 2.83 is in line compared to the rest of the industry. GCT outperforms 46.15% of its industry peers.

The Debt to FCF ratio of GCT is 0.00, which is an excellent value as it means it would take GCT, only 0.00 years of fcf income to pay off all of its debts.

GCT has a better Debt to FCF ratio (0.00) than 84.62% of its industry peers.

A Debt/Equity ratio of 0.00 indicates that GCT is not too dependend on debt financing.

With a decent Debt to Equity ratio value of 0.00, GCT is doing good in the industry, outperforming 76.92% of the companies in the same industry.

		Industry Rank	Sector Rank
Debt/Equity	0
Debt/FCF	0
Altman-Z	2.83

ROIC/WACC0.98

WACC14.52%

2.3 Liquidity

GCT has a Current Ratio of 1.83. This is a normal value and indicates that GCT is financially healthy and should not expect problems in meeting its short term obligations.

GCT's Current ratio of 1.83 is in line compared to the rest of the industry. GCT outperforms 53.85% of its industry peers.

A Quick Ratio of 1.09 indicates that GCT should not have too much problems paying its short term obligations.

The Quick ratio of GCT (1.09) is better than 69.23% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	1.83
Quick Ratio	1.09

More info and screens

WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

Show peers with great health

3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 302.00% over the past year.

GCT shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 92.98% yearly.

The Revenue has grown by 63.65% in the past year. This is a very strong growth!

GCT shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 36.70% yearly.

EPS 1Y (TTM)302%

EPS 3Y92.98%

EPS 5YN/A

EPS Q2Q%70.28%

Revenue 1Y (TTM)63.65%

Revenue growth 3Y36.7%

Revenue growth 5YN/A

Sales Q2Q%96.46%

3.2 Future

GCT is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 29.77% yearly.

GCT is expected to show a strong growth in Revenue. In the coming years, the Revenue will grow by 31.67% yearly.

EPS Next Y38.54%

EPS Next 2Y36.86%

EPS Next 3Y29.77%

EPS Next 5YN/A

Revenue Next Year65.79%

Revenue Next 2Y41.16%

Revenue Next 3Y31.67%

Revenue Next 5YN/A

3.3 Evolution

Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.

When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.

More info and screens

Find the best growth stocks

Show best growing peers

4. Valuation

4.1 Price/Earnings Ratio

GCT is valuated reasonably with a Price/Earnings ratio of 10.09.

GCT's Price/Earnings ratio is rather cheap when compared to the industry. GCT is cheaper than 100.00% of the companies in the same industry.

The average S&P500 Price/Earnings ratio is at 24.41. GCT is valued rather cheaply when compared to this.

GCT is valuated cheaply with a Price/Forward Earnings ratio of 7.33.

Based on the Price/Forward Earnings ratio, GCT is valued cheaper than 84.62% of the companies in the same industry.

Compared to an average S&P500 Price/Forward Earnings ratio of 20.59, GCT is valued rather cheaply.

		Industry Rank	Sector Rank
PE	10.09
Fwd PE	7.33

4.2 Price Multiples

92.31% of the companies in the same industry are more expensive than GCT, based on the Enterprise Value to EBITDA ratio.

Based on the Price/Free Cash Flow ratio, GCT is valued a bit cheaper than the industry average as 76.92% of the companies are valued more expensively.