Stock Analysis: Affordable Growth

Fundamental Rating

ATGE gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 73 industry peers in the Diversified Consumer Services industry. While ATGE has a great profitability rating, there are some minor concerns on its financial health. ATGE is not overvalued while it is showing excellent growth. This is an interesting combination. With these ratings, ATGE could be worth investigating further for growth investing!.

1. Profitability

1.1 Basic Checks

ATGE had positive earnings in the past year.

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

Of the past 5 years ATGE 4 years were profitable.

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

1.2 Ratios

ATGE's Return On Assets of 8.33% is amongst the best of the industry. ATGE outperforms 82.19% of its industry peers.

Looking at the Return On Equity, with a value of 16.21%, ATGE belongs to the top of the industry, outperforming 80.82% of the companies in the same industry.

ATGE has a better Return On Invested Capital (13.23%) than 90.41% of its industry peers.

Measured over the past 3 years, the Average Return On Invested Capital for ATGE is below the industry average of 11.96%.

The 3 year average ROIC (7.66%) for ATGE is below the current ROIC(13.23%), indicating increased profibility in the last year.

		Industry Rank	Sector Rank
ROA	8.33%
ROE	16.21%
ROIC	13.23%

ROA(3y)6.19%

ROA(5y)3.41%

ROE(3y)12.42%

ROE(5y)7.22%

ROIC(3y)7.66%

ROIC(5y)7.12%

1.3 Margins

ATGE's Profit Margin of 13.34% is amongst the best of the industry. ATGE outperforms 90.41% of its industry peers.

ATGE's Profit Margin has declined in the last couple of years.

ATGE's Operating Margin of 19.55% is amongst the best of the industry. ATGE outperforms 84.93% of its industry peers.

In the last couple of years the Operating Margin of ATGE has declined.

ATGE's Gross Margin of 56.63% is fine compared to the rest of the industry. ATGE outperforms 73.97% of its industry peers.

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

		Industry Rank	Sector Rank
OM	19.55%
PM (TTM)	13.34%
GM	56.63%

OM growth 3Y-1.18%

OM growth 5Y-2.38%

PM growth 3Y3.49%

PM growth 5Y-1.67%

GM growth 3Y4.44%

GM growth 5Y0.9%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

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

ATGE has less shares outstanding than it did 1 year ago.

ATGE has less shares outstanding than it did 5 years ago.

ATGE has a better debt/assets ratio than last year.

2.2 Solvency

ATGE has an Altman-Z score of 4.46. This indicates that ATGE is financially healthy and has little risk of bankruptcy at the moment.

With an excellent Altman-Z score value of 4.46, ATGE belongs to the best of the industry, outperforming 86.30% of the companies in the same industry.

The Debt to FCF ratio of ATGE is 1.90, which is an excellent value as it means it would take ATGE, only 1.90 years of fcf income to pay off all of its debts.

The Debt to FCF ratio of ATGE (1.90) is better than 82.19% of its industry peers.

ATGE has a Debt/Equity ratio of 0.39. This is a healthy value indicating a solid balance between debt and equity.

With a Debt to Equity ratio value of 0.39, ATGE perfoms like the industry average, outperforming 45.21% of the companies in the same industry.

		Industry Rank	Sector Rank
Debt/Equity	0.39
Debt/FCF	1.9
Altman-Z	4.46

ROIC/WACC1.49

WACC8.9%

2.3 Liquidity

ATGE has a Current Ratio of 0.83. This is a bad value and indicates that ATGE is not financially healthy enough and could expect problems in meeting its short term obligations.

With a Current ratio value of 0.83, ATGE perfoms like the industry average, outperforming 41.10% of the companies in the same industry.

A Quick Ratio of 0.83 indicates that ATGE may have some problems paying its short term obligations.

With a Quick ratio value of 0.83, ATGE perfoms like the industry average, outperforming 42.47% of the companies in the same industry.

		Industry Rank	Sector Rank
Current Ratio	0.83
Quick Ratio	0.83

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

ATGE shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 36.25%, which is quite impressive.

Measured over the past years, ATGE shows a quite strong growth in Earnings Per Share. The EPS has been growing by 12.11% on average per year.

ATGE shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 13.10%.

Measured over the past years, ATGE shows a quite strong growth in Revenue. The Revenue has been growing by 9.34% on average per year.

EPS 1Y (TTM)36.25%

EPS 3Y19.2%

EPS 5Y12.11%

EPS Q2Q%28%

Revenue 1Y (TTM)13.1%

Revenue growth 3Y20.79%

Revenue growth 5Y9.34%

Sales Q2Q%12.94%

3.2 Future

ATGE is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 20.50% yearly.

Based on estimates for the next years, ATGE will show a small growth in Revenue. The Revenue will grow by 7.86% on average per year.

EPS Next Y26.74%

EPS Next 2Y20.5%

EPS Next 3YN/A

EPS Next 5YN/A

Revenue Next Year11.59%

Revenue Next 2Y8.83%

Revenue Next 3Y7.86%

Revenue Next 5YN/A

3.3 Evolution

The EPS growth rate is accelerating: in the next years the growth will be better than in the last 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.

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4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 20.30, which indicates a rather expensive current valuation of ATGE.

Based on the Price/Earnings ratio, ATGE is valued a bit cheaper than 69.86% of the companies in the same industry.

ATGE's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 24.85.

The Price/Forward Earnings ratio is 17.76, which indicates a rather expensive current valuation of ATGE.

67.12% of the companies in the same industry are more expensive than ATGE, based on the Price/Forward Earnings ratio.

Compared to an average S&P500 Price/Forward Earnings ratio of 20.89, ATGE is valued at the same level.

		Industry Rank	Sector Rank
PE	20.3
Fwd PE	17.76

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, ATGE is valued a bit cheaper than the industry average as 61.64% of the companies are valued more expensively.

80.82% of the companies in the same industry are more expensive than ATGE, based on the Price/Free Cash Flow ratio.