ALLIANCE DATA SYSTEMS CORP (ADS) Stock Fundamental Analysis

NYSE:ADS

56.8
+0.65 (+1.16%)
At close: Apr 1, 2022
56.8
0 (0%)
After Hours: 4/1/2022, 8:10:18 PM
Overview Stock Chart Technical Analysis Fundamental Analysis Analyst Ratings Earnings Estimates Financials Ownership News
Fundamental Rating

2

Overall ADS gets a fundamental rating of 2 out of 10. We evaluated ADS against 87 industry peers in the IT Services industry. ADS has a bad profitability rating. Also its financial health evaluation is rather negative. ADS is quite expensive at the moment. It does show a decent growth rate.


Dividend Valuation Growth Profitability Health

0

1. Profitability

1.1 Basic Checks

  • In the past year ADS was profitable.
ADS Yearly Net Income VS EBIT VS OCF VS FCFADS Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2016 2017 2018 2019 2020 2021 500M 1B 1.5B 2B 2.5B

1.2 Ratios

Industry RankSector 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
ADS Yearly ROA, ROE, ROICADS Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2016 2017 2018 2019 2020 2021 10 20 30 40

1.3 Margins

Industry RankSector 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
ADS Yearly Profit, Operating, Gross MarginsADS Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2016 2017 2018 2019 2020 2021 20 40 60 80

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ROAROEROICOperating and Profit MarginShow most profitable peers

1

2. Health

2.1 Basic Checks

  • Compared to 1 year ago, ADS has about the same amount of shares outstanding.
  • The debt/assets ratio for ADS is higher compared to a year ago.
ADS Yearly Shares OutstandingADS Yearly Shares OutstandingYearly Shares Outstanding 2016 2017 2018 2019 2020 2021 10M 20M 30M 40M 50M
ADS Yearly Total Debt VS Total AssetsADS Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2016 2017 2018 2019 2020 2021 10B 20B 30B

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 RankSector Rank
Debt/Equity 8.85
Debt/FCF N/A
Altman-Z 0.89
ROIC/WACCN/A
WACCN/A
ADS Yearly LT Debt VS Equity VS FCFADS Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2016 2017 2018 2019 2020 2021 5B 10B 15B

2.3 Liquidity

  • A Current Ratio of 1.50 indicates that ADS should not have too much problems paying 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 RankSector Rank
Current Ratio 1.5
Quick Ratio 1.48
ADS Yearly Current Assets VS Current LiabilitesADS Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2016 2017 2018 2019 2020 5B 10B 15B 20B

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WACCDebt/EquityHow to determine the health of a companyAltman-Z scoreShow peers with great health

5

3. Growth

3.1 Past

  • ADS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 91.57%, which is quite impressive.
  • Measured over the past 5 years, ADS shows a small growth in Earnings Per Share. The EPS has been growing by 1.18% on average per year.
  • Looking at the last year, ADS shows a very strong growth in Revenue. The Revenue has grown by 51.53%.
  • ADS shows a very negative growth in Revenue. Measured over the last years, the Revenue has been decreasing by -12.53% yearly.
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

  • ADS is expected to show a decrease in Earnings Per Share. In the coming years, the EPS will decrease by -3.22% yearly.
  • 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.
  • The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
ADS Yearly Revenue VS EstimatesADS Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2B 4B 6B
ADS Yearly EPS VS EstimatesADS Yearly EPS VS EstimatesYearly EPS VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 5 10 15 20

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3

4. Valuation

4.1 Price/Earnings Ratio

  • The Price/Earnings ratio is 3.16, which indicates a rather cheap valuation of ADS.
  • The average S&P500 Price/Earnings ratio is at 27.97. ADS is valued rather cheaply when compared to this.
  • The Price/Forward Earnings ratio is 4.83, which indicates a rather cheap valuation of ADS.
  • Compared to an average S&P500 Price/Forward Earnings ratio of 27.96, ADS is valued rather cheaply.
Industry RankSector Rank
PE 3.16
Fwd PE 4.83
ADS Price Earnings VS Forward Price EarningsADS Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30

4.2 Price Multiples

Industry RankSector Rank
P/FCF N/A
EV/EBITDA 7.2
ADS Per share dataADS EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 20 40 60 80 100

4.3 Compensation for Growth

  • ADS's earnings are expected to decrease with -9.20% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)2.69
EPS Next 2Y-18.42%
EPS Next 3Y-9.2%

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Price/EarningsPrice/FCFFCF per shareEV/EBITDAPEG RATIOShow best valued peers

3

5. Dividend

5.1 Amount

  • ADS has a Yearly Dividend Yield of 1.47%. Purely for dividend investing, there may be better candidates out there.
  • Compared to an average S&P500 Dividend Yield of 1.84, ADS has a dividend comparable with the average S&P500 company.
Industry RankSector 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
ADS Yearly Dividends per shareADS Yearly Dividends per shareYearly Dividends per share 2016 2017 2018 2019 2020 2021 2022 0.5 1 1.5 2 2.5

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%
ADS Yearly Income VS Free CF VS DividendADS Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2016 2017 2018 2019 2020 2021 500M 1B 1.5B 2B 2.5B
ADS Dividend Payout.ADS Dividend Payout, showing the Payout Ratio.ADS Dividend Payout.PayoutRetained Earnings

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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 IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)01-27
Earnings (Next)04-28
Inst Owners102.03%
Inst Owner Change-0.74%
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 RankSector 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 RankSector 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 RankSector 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 RankSector 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.


What is the valuation status for ADS stock?

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 valuation of ALLIANCE DATA SYSTEMS CORP based on its PE and PB ratios?

The Price/Earnings (PE) ratio for ALLIANCE DATA SYSTEMS CORP (ADS) is 3.16 and the Price/Book (PB) ratio is 1.36.


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%.