ADS Fundamental Analysis - ALLIANCE DATA SYSTEMS CORP

Name: ALLIANCE DATA SYSTEMS CORP (ADS) Stock
Brand: ALLIANCE DATA SYSTEMS CORP
Rating: 4 (3 reviews)

Fundamental Rating

Overall ADS gets a fundamental rating of 2 out of 10. We evaluated ADS against 84 industry peers in the IT Services industry. ADS has a bad profitability rating. Also its financial health evaluation is rather negative. ADS is valied quite expensively at the moment, while it does show a decent growth rate.

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1. Profitability

1.1 Basic Checks

In the past year ADS was profitable.

1.2 Ratios

		Industry Rank	Sector Rank
ROA	7.29%
ROE	75.95%
ROIC	N/A

ROA(3y)N/A

ROA(5y)N/A

ROE(3y)N/A

ROE(5y)N/A

ROIC(3y)N/A

ROIC(5y)N/A

1.3 Margins

		Industry Rank	Sector Rank
OM	35.19%
PM (TTM)	23.12%
GM	N/A

OM growth 3YN/A

OM growth 5YN/A

PM growth 3YN/A

PM growth 5YN/A

GM growth 3YN/A

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

The number of shares outstanding for ADS remains at a similar level compared to 1 year ago.

Compared to 1 year ago, ADS has a worse debt to assets ratio.

2.2 Solvency

Based on the Altman-Z score of 0.89, we must say that ADS is in the distress zone and has some risk of bankruptcy.

A Debt/Equity ratio of 8.85 is on the high side and indicates that ADS has dependencies on debt financing.

		Industry Rank	Sector Rank
Debt/Equity	8.85
Debt/FCF	N/A
Altman-Z	0.89

ROIC/WACCN/A

WACCN/A

2.3 Liquidity

ADS has a Current Ratio of 1.50. This is a normal value and indicates that ADS is financially healthy and should not expect problems in meeting its short term obligations.

A Quick Ratio of 1.48 indicates that ADS should not have too much problems paying its short term obligations.

		Industry Rank	Sector Rank
Current Ratio	1.5
Quick Ratio	1.48

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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 grown by an impressive 91.57% over the past year.

ADS shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 1.18% yearly.

Looking at the last year, ADS shows a very strong growth in Revenue. The Revenue has grown by 51.53%.

Measured over the past years, ADS shows a very negative growth in Revenue. The Revenue has been decreasing by -12.53% on average per year.

EPS 1Y (TTM)91.57%

EPS 3Y-7.6%

EPS 5Y1.18%

EPS Q2Q%-63.44%

Revenue 1Y (TTM)51.53%

Revenue growth 3Y-13.6%

Revenue growth 5Y-12.53%

Sales Q2Q%229.31%

3.2 Future

Based on estimates for the next years, ADS will show a decrease in Earnings Per Share. The EPS will decrease by -3.22% on average per year.

Based on estimates for the next years, ADS will show a quite strong growth in Revenue. The Revenue will grow by 8.78% on average per year.

EPS Next Y-34.51%

EPS Next 2Y-18.42%

EPS Next 3Y-9.2%

EPS Next 5Y-3.22%

Revenue Next Year-7.76%

Revenue Next 2Y1.58%

Revenue Next 3Y6%

Revenue Next 5Y8.78%

3.3 Evolution

The EPS growth rate is decreasing: in the next years the growth will be less 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 accelerating.

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4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 3.16, the valuation of ADS can be described as very cheap.

When comparing the Price/Earnings ratio of ADS to the average of the S&P500 Index (25.89), we can say ADS is valued rather cheaply.

A Price/Forward Earnings ratio of 4.83 indicates a rather cheap valuation of ADS.

The average S&P500 Price/Forward Earnings ratio is at 34.59. ADS is valued rather cheaply when compared to this.

		Industry Rank	Sector Rank
PE	3.16
Fwd PE	4.83

4.2 Price Multiples

		Industry Rank	Sector Rank
P/FCF	N/A
EV/EBITDA	7.2

4.3 Compensation for Growth

A cheap valuation may be justified as ADS's earnings are expected to decrease with -9.20% in the coming years.

PEG (NY)N/A

PEG (5Y)2.69

EPS Next 2Y-18.42%

EPS Next 3Y-9.2%

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5. Dividend

5.1 Amount

ADS has a Yearly Dividend Yield of 1.47%.

ADS's Dividend Yield is slightly below the S&P500 average, which is at 2.42.

		Industry Rank	Sector Rank
Dividend Yield	1.47%

5.2 History

The dividend of ADS decreases each year by -28.31%.

ADS has been paying a dividend for over 5 years, so it has already some track record.

Dividend Growth(5Y)-28.31%

Div Incr YearsN/A

Div Non Decr YearsN/A

5.3 Sustainability

ADS pays out 2.65% of its income as dividend. This is a sustainable payout ratio.

The Dividend Rate of ADS has been decling, while earnings will also be declining. This means the current dividend is most likely not sustainable.

DP2.65%

EPS Next 2Y-18.42%

EPS Next 3Y-9.2%

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ALLIANCE DATA SYSTEMS CORP

NYSE:ADS (4/1/2022, 8:10:18 PM)

After market: 56.8 0 (0%)

56.8

+0.65 (+1.16%)

Chartmill FA Rating

GICS SectorInformation Technology

GICS IndustryGroupSoftware & Services

GICS IndustryIT Services

Earnings (Last)01-27 2022-01-27/bmo

Earnings (Next)04-28 2022-04-28/bmo

Inst Owners102.03%

Inst Owner Change-0.71%

Ins Owners3.15%

Ins Owner Change0%

Market Cap2.83B

Revenue(TTM)6.85B

Net Income(TTM)1.58B

Analysts73.91

Price Target91.36 (60.85%)

Short Float %N/A

Short RatioN/A

Dividend

		Industry Rank	Sector Rank
Dividend Yield	1.47%

Yearly Dividend0.84

Dividend Growth(5Y)-28.31%

DP2.65%

Div Incr YearsN/A

Div Non Decr YearsN/A

Ex-DateN/A

Surprises & Revisions

EPS beat(2)N/A

Avg EPS beat(2)N/A

Min EPS beat(2)N/A

Max EPS beat(2)N/A

EPS beat(4)N/A

Avg EPS beat(4)N/A

Min EPS beat(4)N/A

Max EPS beat(4)N/A

EPS beat(8)N/A

Avg EPS beat(8)N/A

EPS beat(12)N/A

Avg EPS beat(12)N/A

EPS beat(16)N/A

Avg EPS beat(16)N/A

Revenue beat(2)N/A

Avg Revenue beat(2)N/A

Min Revenue beat(2)N/A

Max Revenue beat(2)N/A

Revenue beat(4)N/A

Avg Revenue beat(4)N/A

Min Revenue beat(4)N/A

Max Revenue beat(4)N/A

Revenue beat(8)N/A

Avg Revenue beat(8)N/A

Revenue beat(12)N/A

Avg Revenue beat(12)N/A

Revenue beat(16)N/A

Avg Revenue beat(16)N/A

PT rev (1m)N/A

PT rev (3m)N/A

EPS NQ rev (1m)N/A

EPS NQ rev (3m)N/A

EPS NY rev (1m)N/A

EPS NY rev (3m)N/A

Revenue NQ rev (1m)N/A

Revenue NQ rev (3m)N/A

Revenue NY rev (1m)N/A

Revenue NY rev (3m)N/A

Valuation

		Industry Rank	Sector Rank
PE	3.16
Fwd PE	4.83
P/S	0.41
P/FCF	N/A
P/OCF	N/A
P/B	1.36
P/tB	N/A
EV/EBITDA	7.2

EPS(TTM)17.95

EY31.6%

EPS(NY)11.76

Fwd EY20.7%

FCF(TTM)N/A

FCFYN/A

OCF(TTM)N/A

OCFYN/A

SpS137.17

BVpS41.76

TBVpSN/A

PEG (NY)N/A

PEG (5Y)2.69

Graham NumberN/A

Profitability

		Industry Rank	Sector Rank
ROA	7.29%
ROE	75.95%
ROCE	N/A
ROIC	N/A
ROICexc	N/A
ROICexgc	N/A
OM	35.19%
PM (TTM)	23.12%
GM	N/A
FCFM	N/A

ROA(3y)N/A

ROA(5y)N/A

ROE(3y)N/A

ROE(5y)N/A

ROIC(3y)N/A

ROIC(5y)N/A

ROICexc(3y)N/A

ROICexc(5y)N/A

ROICexgc(3y)N/A

ROICexgc(5y)N/A

ROCE(3y)N/A

ROCE(5y)N/A

ROICexgc growth 3Y0%

ROICexgc growth 5Y0%

ROICexc growth 3YN/A

ROICexc growth 5YN/A

OM growth 3YN/A

OM growth 5YN/A

PM growth 3YN/A

PM growth 5YN/A

GM growth 3YN/A

GM growth 5YN/A

F-Score5

Asset Turnover0.32

Health

		Industry Rank	Sector Rank
Debt/Equity	8.85
Debt/FCF	N/A
Debt/EBITDA	N/A
Cap/Depr	N/A
Cap/Sales	N/A
Interest Coverage	N/A
Cash Conversion	N/A
Profit Quality	N/A
Current Ratio	1.5
Quick Ratio	1.48
Altman-Z	0.89

F-Score5

WACCN/A

ROIC/WACCN/A

Cap/Depr(3y)N/A

Cap/Depr(5y)N/A

Cap/Sales(3y)N/A

Cap/Sales(5y)N/A

Profit Quality(3y)N/A

Profit Quality(5y)N/A

High Growth Momentum

Growth

EPS 1Y (TTM)91.57%

EPS 3Y-7.6%

EPS 5Y1.18%

EPS Q2Q%-63.44%

EPS Next Y-34.51%

EPS Next 2Y-18.42%

EPS Next 3Y-9.2%

EPS Next 5Y-3.22%

Revenue 1Y (TTM)51.53%

Revenue growth 3Y-13.6%

Revenue growth 5Y-12.53%

Sales Q2Q%229.31%

Revenue Next Year-7.76%

Revenue Next 2Y1.58%

Revenue Next 3Y6%

Revenue Next 5Y8.78%

EBIT growth 1YN/A

EBIT growth 3YN/A

EBIT growth 5YN/A

EBIT Next YearN/A

EBIT Next 3YN/A

EBIT Next 5YN/A

FCF growth 1YN/A

FCF growth 3YN/A

FCF growth 5YN/A

OCF growth 1YN/A

OCF growth 3YN/A

OCF growth 5YN/A

ALLIANCE DATA SYSTEMS CORP / ADS FAQ

What is the ChartMill fundamental rating of ALLIANCE DATA SYSTEMS CORP (ADS) stock?

ChartMill assigns a fundamental rating of 5 / 10 to ADS.

Can you provide the valuation status for ALLIANCE DATA SYSTEMS CORP?

ChartMill assigns a valuation rating of 7 / 10 to ALLIANCE DATA SYSTEMS CORP (ADS). This can be considered as Undervalued.

What is the profitability of ADS stock?

ALLIANCE DATA SYSTEMS CORP (ADS) has a profitability rating of 7 / 10.

What is the earnings growth outlook for ALLIANCE DATA SYSTEMS CORP?

The Earnings per Share (EPS) of ALLIANCE DATA SYSTEMS CORP (ADS) is expected to decline by -34.51% in the next year.

Can you provide the dividend sustainability for ADS stock?

The dividend rating of ALLIANCE DATA SYSTEMS CORP (ADS) is 4 / 10 and the dividend payout ratio is 2.65%.

ALLIANCE DATA SYSTEMS CORP (ADS) Stock Fundamental Analysis

1. Profitability

1.1 Basic Checks

1.2 Ratios

1.3 Margins

More info and screens

2. Health

2.1 Basic Checks

2.2 Solvency

2.3 Liquidity

More info and screens

3. Growth

3.1 Past

3.2 Future

3.3 Evolution

More info and screens

4. Valuation

4.1 Price/Earnings Ratio

4.2 Price Multiples

4.3 Compensation for Growth

More info and screens

5. Dividend

5.1 Amount

5.2 History

5.3 Sustainability

More info and screens

ALLIANCE DATA SYSTEMS CORP / ADS FAQ

What is the ChartMill fundamental rating of ALLIANCE DATA SYSTEMS CORP (ADS) stock?

Can you provide the valuation status for ALLIANCE DATA SYSTEMS CORP?

What is the profitability of ADS stock?

What is the earnings growth outlook for ALLIANCE DATA SYSTEMS CORP?

Can you provide the dividend sustainability for ADS stock?