AMDOCS LTD (DOX) Stock Fundamental Analysis
NASDAQ:DOX - Nasdaq - GB0022569080 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to DOX. DOX was compared to 82 industry peers in the IT Services industry. While DOX has a great profitability rating, there are some minor concerns on its financial health. DOX may be a bit undervalued, certainly considering the very reasonable score on growth These ratings could make DOX a good candidate for value investing.
1. Profitability
1.1 Basic Checks
DOX had positive earnings in the past year.
In the past year DOX had a positive cash flow from operations.
Each year in the past 5 years DOX has been profitable.
Each year in the past 5 years DOX had a positive operating cash flow.
1.2 Ratios
The Return On Assets of DOX (8.56%) is better than 76.83% of its industry peers.
DOX has a better Return On Equity (15.34%) than 74.39% of its industry peers.
With an excellent Return On Invested Capital value of 13.74%, DOX belongs to the best of the industry, outperforming 84.15% of the companies in the same industry.
DOX had an Average Return On Invested Capital over the past 3 years of 12.04%. This is significantly below the industry average of 21.61%.
The last Return On Invested Capital (13.74%) for DOX is above the 3 year average (12.04%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.56% | ||
| ROE | 15.34% | ||
| ROIC | 13.75% |
ROA(3y)8.11%
ROA(5y)8.52%
ROE(3y)14.83%
ROE(5y)15.42%
ROIC(3y)12.04%
ROIC(5y)11.1%
1.3 Margins
Looking at the Profit Margin, with a value of 11.17%, DOX is in the better half of the industry, outperforming 79.27% of the companies in the same industry.
DOX's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 16.62%, DOX belongs to the top of the industry, outperforming 86.59% of the companies in the same industry.
DOX's Operating Margin has improved in the last couple of years.
DOX's Gross Margin of 36.55% is in line compared to the rest of the industry. DOX outperforms 53.66% of its industry peers.
DOX's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 16.62% | ||
| PM (TTM) | 11.17% | ||
| GM | 36.55% |
OM growth 3Y2.83%
OM growth 5Y1.69%
PM growth 3Y-15.26%
PM growth 5Y-3.67%
GM growth 3Y0.59%
GM growth 5Y-0.01%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so DOX is still creating some value.
Compared to 1 year ago, DOX has less shares outstanding
DOX has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, DOX has a worse debt to assets ratio.
2.2 Solvency
DOX has an Altman-Z score of 4.95. This indicates that DOX is financially healthy and has little risk of bankruptcy at the moment.
With a decent Altman-Z score value of 4.95, DOX is doing good in the industry, outperforming 71.95% of the companies in the same industry.
The Debt to FCF ratio of DOX is 1.07, which is an excellent value as it means it would take DOX, only 1.07 years of fcf income to pay off all of its debts.
DOX's Debt to FCF ratio of 1.07 is amongst the best of the industry. DOX outperforms 80.49% of its industry peers.
DOX has a Debt/Equity ratio of 0.19. This is a healthy value indicating a solid balance between debt and equity.
Looking at the Debt to Equity ratio, with a value of 0.19, DOX is in the better half of the industry, outperforming 60.98% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.19 | ||
| Debt/FCF | 1.07 | ||
| Altman-Z | 4.95 |
ROIC/WACC1.43
WACC9.58%
2.3 Liquidity
A Current Ratio of 1.16 indicates that DOX should not have too much problems paying its short term obligations.
The Current ratio of DOX (1.16) is worse than 71.95% of its industry peers.
A Quick Ratio of 1.16 indicates that DOX should not have too much problems paying its short term obligations.
DOX has a Quick ratio of 1.16. This is in the lower half of the industry: DOX underperforms 70.73% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.16 | ||
| Quick Ratio | 1.16 |
3. Growth
3.1 Past
DOX shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 10.64%, which is quite good.
Measured over the past years, DOX shows a quite strong growth in Earnings Per Share. The EPS has been growing by 8.36% on average per year.
DOX shows a decrease in Revenue. In the last year, the revenue decreased by -4.37%.
Measured over the past years, DOX shows a small growth in Revenue. The Revenue has been growing by 4.14% on average per year.
EPS 1Y (TTM)10.64%
EPS 3Y10.29%
EPS 5Y8.36%
EPS Q2Q%14.1%
Revenue 1Y (TTM)-4.37%
Revenue growth 3Y5.28%
Revenue growth 5Y4.14%
Sales Q2Q%-9.44%
3.2 Future
DOX is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.75% yearly.
DOX is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 0.58% yearly.
EPS Next Y9.35%
EPS Next 2Y9.19%
EPS Next 3Y8.75%
EPS Next 5YN/A
Revenue Next Year-9.8%
Revenue Next 2Y-3.05%
Revenue Next 3Y0.58%
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 13.00, the valuation of DOX can be described as correct.
DOX's Price/Earnings ratio is rather cheap when compared to the industry. DOX is cheaper than 85.37% of the companies in the same industry.
DOX's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 28.05.
DOX is valuated reasonably with a Price/Forward Earnings ratio of 11.44.
86.59% of the companies in the same industry are more expensive than DOX, based on the Price/Forward Earnings ratio.
DOX is valuated cheaply when we compare the Price/Forward Earnings ratio to 37.67, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13 | ||
| Fwd PE | 11.44 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, DOX is valued a bit cheaper than the industry average as 76.83% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, DOX is valued cheaply inside the industry as 84.15% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.23 | ||
| EV/EBITDA | 10.24 |
4.3 Compensation for Growth
DOX's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The decent profitability rating of DOX may justify a higher PE ratio.
PEG (NY)1.39
PEG (5Y)1.55
EPS Next 2Y9.19%
EPS Next 3Y8.75%
5. Dividend
5.1 Amount
DOX has a Yearly Dividend Yield of 2.35%.
DOX's Dividend Yield is rather good when compared to the industry average which is at 2.41. DOX pays more dividend than 93.90% of the companies in the same industry.
DOX's Dividend Yield is comparable with the S&P500 average which is at 2.30.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.35% |
5.2 History
On average, the dividend of DOX grows each year by 11.39%, which is quite nice.
DOX has paid a dividend for at least 10 years, which is a reliable track record.
DOX has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)11.39%
Div Incr Years12
Div Non Decr Years12
5.3 Sustainability
41.07% of the earnings are spent on dividend by DOX. This is a bit on the high side, but may be sustainable.
DOX's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP41.07%
EPS Next 2Y9.19%
EPS Next 3Y8.75%
87.85
-0.56 (-0.63%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners100.53%
Inst Owner Change-0.3%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap9.77B
Analysts83.64
Price Target104.21 (18.62%)
Short Float %3.12%
Short Ratio5.25
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.35% |
Yearly Dividend1.84
Dividend Growth(5Y)11.39%
DP41.07%
Div Incr Years12
Div Non Decr Years12
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)1.88%
Min EPS beat(2)0.39%
Max EPS beat(2)3.37%
EPS beat(4)2
Avg EPS beat(4)0.7%
Min EPS beat(4)-0.91%
Max EPS beat(4)3.37%
EPS beat(8)3
Avg EPS beat(8)0.61%
EPS beat(12)4
Avg EPS beat(12)0.91%
EPS beat(16)7
Avg EPS beat(16)2.77%
Revenue beat(2)0
Avg Revenue beat(2)-1.01%
Min Revenue beat(2)-1.42%
Max Revenue beat(2)-0.6%
Revenue beat(4)0
Avg Revenue beat(4)-1.06%
Min Revenue beat(4)-1.42%
Max Revenue beat(4)-0.6%
Revenue beat(8)0
Avg Revenue beat(8)-0.96%
Revenue beat(12)1
Avg Revenue beat(12)-0.85%
Revenue beat(16)2
Avg Revenue beat(16)5.3%
PT rev (1m)0.46%
PT rev (3m)0.55%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-3.39%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.04%
Revenue NQ rev (1m)0.09%
Revenue NQ rev (3m)-0.17%
Revenue NY rev (1m)0.04%
Revenue NY rev (3m)-0.13%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13 | ||
| Fwd PE | 11.44 | ||
| P/S | 2.06 | ||
| P/FCF | 16.23 | ||
| P/OCF | 14.21 | ||
| P/B | 2.82 | ||
| P/tB | 24.12 | ||
| EV/EBITDA | 10.24 |
EPS(TTM)6.76
EY7.69%
EPS(NY)7.68
Fwd EY8.74%
FCF(TTM)5.41
FCFY6.16%
OCF(TTM)6.18
OCFY7.04%
SpS42.73
BVpS31.12
TBVpS3.64
PEG (NY)1.39
PEG (5Y)1.55
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.56% | ||
| ROE | 15.34% | ||
| ROCE | 16.24% | ||
| ROIC | 13.75% | ||
| ROICexc | 14.73% | ||
| ROICexgc | 45.04% | ||
| OM | 16.62% | ||
| PM (TTM) | 11.17% | ||
| GM | 36.55% | ||
| FCFM | 12.67% |
ROA(3y)8.11%
ROA(5y)8.52%
ROE(3y)14.83%
ROE(5y)15.42%
ROIC(3y)12.04%
ROIC(5y)11.1%
ROICexc(3y)13.94%
ROICexc(5y)13.13%
ROICexgc(3y)42.67%
ROICexgc(5y)40.42%
ROCE(3y)14.23%
ROCE(5y)13.16%
ROICexcg growth 3Y7.36%
ROICexcg growth 5Y-2.03%
ROICexc growth 3Y6.95%
ROICexc growth 5Y1.8%
OM growth 3Y2.83%
OM growth 5Y1.69%
PM growth 3Y-15.26%
PM growth 5Y-3.67%
GM growth 3Y0.59%
GM growth 5Y-0.01%
F-Score6
Asset Turnover0.77
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.19 | ||
| Debt/FCF | 1.07 | ||
| Debt/EBITDA | 0.66 | ||
| Cap/Depr | 45.45% | ||
| Cap/Sales | 1.8% | ||
| Interest Coverage | 20.25 | ||
| Cash Conversion | 70.3% | ||
| Profit Quality | 113.39% | ||
| Current Ratio | 1.16 | ||
| Quick Ratio | 1.16 | ||
| Altman-Z | 4.95 |
F-Score6
WACC9.58%
ROIC/WACC1.43
Cap/Depr(3y)73.13%
Cap/Depr(5y)84.75%
Cap/Sales(3y)3.21%
Cap/Sales(5y)3.89%
Profit Quality(3y)119.02%
Profit Quality(5y)110.73%
High Growth Momentum
Growth
EPS 1Y (TTM)10.64%
EPS 3Y10.29%
EPS 5Y8.36%
EPS Q2Q%14.1%
EPS Next Y9.35%
EPS Next 2Y9.19%
EPS Next 3Y8.75%
EPS Next 5YN/A
Revenue 1Y (TTM)-4.37%
Revenue growth 3Y5.28%
Revenue growth 5Y4.14%
Sales Q2Q%-9.44%
Revenue Next Year-9.8%
Revenue Next 2Y-3.05%
Revenue Next 3Y0.58%
Revenue Next 5YN/A
EBIT growth 1Y6.56%
EBIT growth 3Y8.26%
EBIT growth 5Y5.9%
EBIT Next Year22.95%
EBIT Next 3Y12.03%
EBIT Next 5YN/A
FCF growth 1Y5.62%
FCF growth 3Y-4.71%
FCF growth 5Y3.22%
OCF growth 1Y-9.72%
OCF growth 3Y-7.85%
OCF growth 5Y1.99%