We assign a fundamental rating of 2 out of 10 to CTOS. CTOS was compared to 50 industry peers in the Trading Companies & Distributors industry. Both the profitability and financial health of CTOS have multiple concerns. CTOS is valied quite expensively at the moment, while it does show a decent growth rate.

Quickly go to:

1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

CTOS had negative earnings in the past year.
In the past year CTOS had a positive cash flow from operations.
The reported net income has been mixed in the past 5 years: CTOS reported negative net income in multiple years.
CTOS had a positive operating cash flow in 4 of the past 5 years.

1.2 Ratios

With a Return On Assets value of -0.69%, CTOS is not doing good in the industry: 70.00% of the companies in the same industry are doing better.
Looking at the Return On Equity, with a value of -3.10%, CTOS is doing worse than 70.00% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 3.51%, CTOS is doing worse than 62.00% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for CTOS is significantly below the industry average of 9.64%.

		Industry Rank	Sector Rank
ROA	-0.69%
ROE	-3.1%
ROIC	3.51%

ROA(3y)0.67%

ROA(5y)-1.5%

ROE(3y)2.19%

ROE(5y)N/A

ROIC(3y)4.42%

ROIC(5y)3.33%

1.3 Margins

With a Operating Margin value of 6.83%, CTOS perfoms like the industry average, outperforming 54.00% of the companies in the same industry.
In the last couple of years the Operating Margin of CTOS has declined.
Looking at the Gross Margin, with a value of 21.03%, CTOS is doing worse than 72.00% of the companies in the same industry.
In the last couple of years the Gross Margin of CTOS has declined.

		Industry Rank	Sector Rank
OM	6.83%
PM (TTM)	N/A
GM	21.03%

OM growth 3Y99.85%

OM growth 5Y-16.77%

PM growth 3YN/A

PM growth 5YN/A

GM growth 3Y6.37%

GM growth 5Y-7.39%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so CTOS is destroying value.
Compared to 1 year ago, CTOS has less shares outstanding
The number of shares outstanding for CTOS has been increased compared to 5 years ago.
The debt/assets ratio for CTOS is higher compared to a year ago.

2.2 Solvency

Based on the Altman-Z score of 0.82, we must say that CTOS is in the distress zone and has some risk of bankruptcy.
With a Altman-Z score value of 0.82, CTOS is not doing good in the industry: 86.00% of the companies in the same industry are doing better.
A Debt/Equity ratio of 3.01 is on the high side and indicates that CTOS has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 3.01, CTOS is doing worse than 78.00% of the companies in the same industry.

		Industry Rank	Sector Rank
Debt/Equity	3.01
Debt/FCF	N/A
Altman-Z	0.82

ROIC/WACC0.36

WACC9.81%

2.3 Liquidity

A Current Ratio of 1.27 indicates that CTOS should not have too much problems paying its short term obligations.
CTOS has a worse Current ratio (1.27) than 76.00% of its industry peers.
CTOS has a Quick Ratio of 1.27. This is a bad value and indicates that CTOS is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Quick ratio value of 0.22, CTOS is not doing good in the industry: 94.00% of the companies in the same industry are doing better.

		Industry Rank	Sector Rank
Current Ratio	1.27
Quick Ratio	0.22

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

CTOS shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -37.50%.
The Revenue has been growing slightly by 7.39% in the past year.
The Revenue has been growing by 46.84% on average over the past years. This is a very strong growth!

EPS 1Y (TTM)-37.5%

EPS 3YN/A

EPS 5YN/A

EPS Q2Q%57.14%

Revenue 1Y (TTM)7.39%

Revenue growth 3Y15.58%

Revenue growth 5Y46.84%

Sales Q2Q%7.79%

3.2 Future

The Earnings Per Share is expected to grow by 34.80% on average over the next years. This is a very strong growth
CTOS is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.50% yearly.

EPS Next Y22.29%

EPS Next 2Y49.44%

EPS Next 3Y34.8%

EPS Next 5YN/A

Revenue Next Year9.62%

Revenue Next 2Y7.36%

Revenue Next 3Y6.5%

Revenue Next 5YN/A

3.3 Evolution

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

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4. Valuation

4.1 Price/Earnings Ratio

CTOS reported negative earnings for the last year, which makes the Price/Earnings Ratio negative.
With a Price/Forward Earnings ratio of 130.72, CTOS can be considered very expensive at the moment.
Based on the Price/Forward Earnings ratio, CTOS is valued a bit more expensive than 72.00% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 25.95, CTOS is valued quite expensively.

		Industry Rank	Sector Rank
PE	N/A
Fwd PE	130.72

4.2 Price Multiples

CTOS's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. CTOS is cheaper than 84.00% of the companies in the same industry.

		Industry Rank	Sector Rank
P/FCF	N/A
EV/EBITDA	7.92

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
A more expensive valuation may be justified as CTOS's earnings are expected to grow with 34.80% in the coming years.