Stock Analysis: Decent Value Stocks

Fundamental Rating

GCT gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 14 industry peers in the Distributors industry. GCT scores excellent on profitability, but there are some minor concerns on its financial health. An interesting combination arises when we look at growth and value: GCT is growing strongly while it also seems undervalued. This makes GCT very considerable for value and growth investing!

1. Profitability

1.1 Basic Checks

GCT had positive earnings in the past year.

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

GCT had positive earnings in each of the past 5 years.

GCT had a positive operating cash flow in each of the past 5 years.

1.2 Ratios

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

Looking at the Return On Equity, with a value of 33.16%, GCT belongs to the top of the industry, outperforming 84.62% of the companies in the same industry.

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 13.48%.

		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

Looking at the Profit Margin, with a value of 12.74%, GCT belongs to the top 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.

The Operating Margin of GCT (15.75%) is better than 92.31% of its industry peers.

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

Looking at the Gross Margin, with a value of 27.28%, GCT is in line with its industry, outperforming 53.85% of the companies in the same 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

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ROA

ROE

ROIC

Operating and Profit Margin

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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.

Compared to 1 year ago, GCT has more shares outstanding

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 has a Altman-Z score (2.83) which is comparable to the rest of the industry.

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.

With an excellent Debt to FCF ratio value of 0.00, GCT belongs to the best of the industry, outperforming 84.62% of the companies in the same industry.

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

The Debt to Equity ratio of GCT (0.00) is better than 76.92% of its industry peers.

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

ROIC/WACC0.98

WACC14.53%

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.

With a Current ratio value of 1.83, GCT perfoms like the industry average, outperforming 53.85% of the companies in the same industry.

GCT has a Quick Ratio of 1.09. This is a normal value and indicates that GCT is financially healthy and should not expect problems in meeting its short term obligations.

GCT has a Quick ratio of 1.09. This is in the better half of the industry: GCT outperforms 69.23% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	1.83
Quick Ratio	1.09

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

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

Measured over the past years, GCT shows a very strong growth in Earnings Per Share. The EPS has been growing by 92.98% on average per year.

Looking at the last year, GCT shows a very strong growth in Revenue. The Revenue has grown by 63.65%.

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

Based on estimates for the next years, GCT will show a very strong growth in Earnings Per Share. The EPS will grow by 29.77% on average per year.

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

The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in 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.

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4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 10.02 indicates a reasonable valuation of GCT.

Compared to the rest of the industry, the Price/Earnings ratio of GCT indicates a rather cheap valuation: GCT is cheaper than 100.00% of the companies listed in the same industry.

When comparing the Price/Earnings ratio of GCT to the average of the S&P500 Index (24.29), we can say GCT is valued rather cheaply.

Based on the Price/Forward Earnings ratio of 7.28, the valuation of GCT can be described as very cheap.

84.62% of the companies in the same industry are more expensive than GCT, based on the Price/Forward Earnings ratio.

When comparing the Price/Forward Earnings ratio of GCT to the average of the S&P500 Index (20.35), we can say GCT is valued rather cheaply.

		Industry Rank	Sector Rank
PE	10.02
Fwd PE	7.28

4.2 Price Multiples

GCT's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. GCT is cheaper than 92.31% of the companies in the same industry.

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.