LEONARDO DRS INC (DRS) Stock Fundamental Analysis
USA - NASDAQ:DRS - US52661A1088 - Common Stock
40.19 USD
-3.66 (-8.35%)
40.49 USD
+0.3 (+0.75%)
DRS gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 69 industry peers in the Aerospace & Defense industry. DRS is in great health and has no worries on liquidiy or solvency at all, but the profibility rating is only average. DRS is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
DRS had positive earnings in the past year.
DRS had a positive operating cash flow in the past year.
DRS had positive earnings in each of the past 5 years.
Of the past 5 years DRS 4 years had a positive operating cash flow.
1.2 Ratios
The Return On Assets of DRS (6.13%) is better than 73.91% of its industry peers.
DRS has a Return On Equity of 9.62%. This is in the better half of the industry: DRS outperforms 65.22% of its industry peers.
The Return On Invested Capital of DRS (8.81%) is better than 79.71% of its industry peers.
The Average Return On Invested Capital over the past 3 years for DRS is significantly above the industry average of 8.33%.
The 3 year average ROIC (14.80%) for DRS is well above the current ROIC(8.81%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.13% | ||
| ROE | 9.62% | ||
| ROIC | 8.81% |
ROA(3y)6.8%
ROA(5y)7.59%
ROE(3y)11.53%
ROE(5y)11.69%
ROIC(3y)14.8%
ROIC(5y)12.07%
1.3 Margins
DRS has a better Profit Margin (7.31%) than 68.12% of its industry peers.
In the last couple of years the Profit Margin of DRS has declined.
With a Operating Margin value of 9.56%, DRS perfoms like the industry average, outperforming 59.42% of the companies in the same industry.
In the last couple of years the Operating Margin of DRS has declined.
DRS has a Gross Margin (23.15%) which is in line with its industry peers.
In the last couple of years the Gross Margin of DRS has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.56% | ||
| PM (TTM) | 7.31% | ||
| GM | 23.15% |
OM growth 3Y-18.83%
OM growth 5YN/A
PM growth 3Y-32.5%
PM growth 5YN/A
GM growth 3Y-17.5%
GM growth 5Y-8.71%
2. Health
2.1 Basic Checks
DRS has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
DRS has more shares outstanding than it did 1 year ago.
DRS has more shares outstanding than it did 5 years ago.
The debt/assets ratio for DRS has been reduced compared to a year ago.
2.2 Solvency
DRS has an Altman-Z score of 4.90. This indicates that DRS is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 4.90, DRS is in the better half of the industry, outperforming 60.87% of the companies in the same industry.
DRS has a debt to FCF ratio of 1.50. This is a very positive value and a sign of high solvency as it would only need 1.50 years to pay back of all of its debts.
DRS has a better Debt to FCF ratio (1.50) than 95.65% of its industry peers.
A Debt/Equity ratio of 0.13 indicates that DRS is not too dependend on debt financing.
DRS has a Debt to Equity ratio of 0.13. This is in the better half of the industry: DRS outperforms 78.26% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.13 | ||
| Debt/FCF | 1.5 | ||
| Altman-Z | 4.9 |
ROIC/WACC0.91
WACC9.69%
2.3 Liquidity
DRS has a Current Ratio of 2.11. This indicates that DRS is financially healthy and has no problem in meeting its short term obligations.
DRS has a Current ratio (2.11) which is comparable to the rest of the industry.
DRS has a Quick Ratio of 1.70. This is a normal value and indicates that DRS is financially healthy and should not expect problems in meeting its short term obligations.
DRS has a Quick ratio of 1.70. This is in the better half of the industry: DRS outperforms 65.22% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.11 | ||
| Quick Ratio | 1.7 |
3. Growth
3.1 Past
DRS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 26.51%, which is quite impressive.
DRS shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 23.42% yearly.
The Revenue has grown by 11.43% in the past year. This is quite good.
DRS shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 135.87% yearly.
EPS 1Y (TTM)26.51%
EPS 3Y23.42%
EPS 5YN/A
EPS Q2Q%27.78%
Revenue 1Y (TTM)11.43%
Revenue growth 3Y202.18%
Revenue growth 5Y135.87%
Sales Q2Q%10.09%
3.2 Future
DRS is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 9.27% yearly.
Based on estimates for the next years, DRS will show a small growth in Revenue. The Revenue will grow by 7.20% on average per year.
EPS Next Y18.67%
EPS Next 2Y16.92%
EPS Next 3Y14.62%
EPS Next 5Y9.27%
Revenue Next Year12.16%
Revenue Next 2Y9.4%
Revenue Next 3Y8.03%
Revenue Next 5Y7.2%
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 decreasing.
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.
4. Valuation
4.1 Price/Earnings Ratio
DRS is valuated quite expensively with a Price/Earnings ratio of 38.28.
65.22% of the companies in the same industry are more expensive than DRS, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 27.55, DRS is valued a bit more expensive.
DRS is valuated quite expensively with a Price/Forward Earnings ratio of 31.28.
Based on the Price/Forward Earnings ratio, DRS is valued a bit cheaper than 63.77% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 23.04. DRS is valued slightly more expensive when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 38.28 | ||
| Fwd PE | 31.28 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of DRS indicates a somewhat cheap valuation: DRS is cheaper than 60.87% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of DRS indicates a somewhat cheap valuation: DRS is cheaper than 71.01% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 45.51 | ||
| EV/EBITDA | 25.7 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates DRS does not grow enough to justify the current Price/Earnings ratio.
DRS has a very decent profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as DRS's earnings are expected to grow with 14.62% in the coming years.
PEG (NY)2.05
PEG (5Y)N/A
EPS Next 2Y16.92%
EPS Next 3Y14.62%
5. Dividend
5.1 Amount
DRS has a yearly dividend return of 0.81%, which is pretty low.
DRS's Dividend Yield is rather good when compared to the industry average which is at 1.16. DRS pays more dividend than 84.06% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.43, DRS's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.81% |
5.2 History
DRS is new to the dividend game and has less than 3 years of track record.
Dividend Growth(5Y)N/A
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
DRS pays out 19.20% of its income as dividend. This is a sustainable payout ratio.
DP19.2%
EPS Next 2Y16.92%
EPS Next 3Y14.62%
40.19
-3.66 (-8.35%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners25.55%
Inst Owner Change0.49%
Ins Owners0.3%
Ins Owner Change-3.18%
Market Cap10.70B
Analysts81.43
Price Target50.21 (24.93%)
Short Float %3.26%
Short Ratio2.27
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.81% |
Yearly Dividend0
Dividend Growth(5Y)N/A
DP19.2%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)13.27%
Min EPS beat(2)6.54%
Max EPS beat(2)20.01%
EPS beat(4)4
Avg EPS beat(4)13.69%
Min EPS beat(4)6.36%
Max EPS beat(4)21.86%
EPS beat(8)8
Avg EPS beat(8)18.04%
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)1
Avg Revenue beat(2)3.29%
Min Revenue beat(2)-0.81%
Max Revenue beat(2)7.38%
Revenue beat(4)3
Avg Revenue beat(4)3.34%
Min Revenue beat(4)-0.81%
Max Revenue beat(4)7.38%
Revenue beat(8)7
Avg Revenue beat(8)4.36%
Revenue beat(12)9
Avg Revenue beat(12)159.28%
Revenue beat(16)11
Avg Revenue beat(16)362.96%
PT rev (1m)0%
PT rev (3m)5.37%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0.5%
EPS NY rev (1m)0%
EPS NY rev (3m)2.37%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)5.6%
Revenue NY rev (1m)-0.08%
Revenue NY rev (3m)1.72%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 38.28 | ||
| Fwd PE | 31.28 | ||
| P/S | 3.13 | ||
| P/FCF | 45.51 | ||
| P/OCF | 31.83 | ||
| P/B | 4.11 | ||
| P/tB | 8.61 | ||
| EV/EBITDA | 25.7 |
EPS(TTM)1.05
EY2.61%
EPS(NY)1.28
Fwd EY3.2%
FCF(TTM)0.88
FCFY2.2%
OCF(TTM)1.26
OCFY3.14%
SpS12.86
BVpS9.77
TBVpS4.67
PEG (NY)2.05
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.13% | ||
| ROE | 9.62% | ||
| ROCE | 10.48% | ||
| ROIC | 8.81% | ||
| ROICexc | 9.67% | ||
| ROICexgc | 18.52% | ||
| OM | 9.56% | ||
| PM (TTM) | 7.31% | ||
| GM | 23.15% | ||
| FCFM | 6.87% |
ROA(3y)6.8%
ROA(5y)7.59%
ROE(3y)11.53%
ROE(5y)11.69%
ROIC(3y)14.8%
ROIC(5y)12.07%
ROICexc(3y)17.19%
ROICexc(5y)16.27%
ROICexgc(3y)41.83%
ROICexgc(5y)31.06%
ROCE(3y)17.68%
ROCE(5y)14.42%
ROICexcg growth 3Y5.24%
ROICexcg growth 5YN/A
ROICexc growth 3Y-19.58%
ROICexc growth 5YN/A
OM growth 3Y-18.83%
OM growth 5YN/A
PM growth 3Y-32.5%
PM growth 5YN/A
GM growth 3Y-17.5%
GM growth 5Y-8.71%
F-Score9
Asset Turnover0.84
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.13 | ||
| Debt/FCF | 1.5 | ||
| Debt/EBITDA | 0.79 | ||
| Cap/Depr | 109.78% | ||
| Cap/Sales | 2.95% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 80.19% | ||
| Profit Quality | 94% | ||
| Current Ratio | 2.11 | ||
| Quick Ratio | 1.7 | ||
| Altman-Z | 4.9 |
F-Score9
WACC9.69%
ROIC/WACC0.91
Cap/Depr(3y)88%
Cap/Depr(5y)129.75%
Cap/Sales(3y)2.39%
Cap/Sales(5y)3.79%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)26.51%
EPS 3Y23.42%
EPS 5YN/A
EPS Q2Q%27.78%
EPS Next Y18.67%
EPS Next 2Y16.92%
EPS Next 3Y14.62%
EPS Next 5Y9.27%
Revenue 1Y (TTM)11.43%
Revenue growth 3Y202.18%
Revenue growth 5Y135.87%
Sales Q2Q%10.09%
Revenue Next Year12.16%
Revenue Next 2Y9.4%
Revenue Next 3Y8.03%
Revenue Next 5Y7.2%
EBIT growth 1Y22.01%
EBIT growth 3Y145.27%
EBIT growth 5YN/A
EBIT Next Year42.14%
EBIT Next 3Y21.88%
EBIT Next 5Y15.46%
FCF growth 1Y266.67%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y573.24%
OCF growth 3YN/A
OCF growth 5YN/A