FRANCHISE GROUP INC (FRG) Stock Fundamental Analysis
USA - NASDAQ:FRG - US35180X1054 - Common Stock
29.88 USD
+0.03 (+0.1%)
29.94 USD
+0.06 (+0.2%)
Taking everything into account, FRG scores 3 out of 10 in our fundamental rating. FRG was compared to 122 industry peers in the Specialty Retail industry. Both the profitability and financial health of FRG have multiple concerns. FRG is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
FRG had positive earnings in the past year.
In the past year FRG had a positive cash flow from operations.
In multiple years FRG reported negative net income over the last 5 years.
FRG had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
The profitability ratios for FRG are negative, so there is not much use analyzing them.
FRG has a Return On Invested Capital of 4.68%. This is comparable to the rest of the industry: FRG outperforms 54.55% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for FRG is below the industry average of 11.81%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | N/A | ||
| ROE | N/A | ||
| ROIC | 4.68% |
ROA(3y)N/A
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)7.05%
ROIC(5y)7.75%
1.3 Margins
FRG has a Operating Margin (3.57%) which is comparable to the rest of the industry.
FRG's Operating Margin has declined in the last couple of years.
The Gross Margin of FRG (39.81%) is better than 62.88% of its industry peers.
In the last couple of years the Gross Margin of FRG has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 3.57% | ||
| PM (TTM) | N/A | ||
| GM | 39.81% |
OM growth 3Y-4.9%
OM growth 5Y-15.6%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-6.31%
GM growth 5YN/A
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), FRG is destroying value.
The number of shares outstanding for FRG has been reduced compared to 1 year ago.
The debt/assets ratio for FRG is higher compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 1.63, we must say that FRG is in the distress zone and has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 1.63, FRG is doing worse than 65.91% of the companies in the same industry.
A Debt/Equity ratio of 6.97 is on the high side and indicates that FRG has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 6.97, FRG is doing worse than 80.30% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 6.97 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.63 |
ROIC/WACC0.63
WACC7.39%
2.3 Liquidity
FRG has a Current Ratio of 1.37. This is a normal value and indicates that FRG is financially healthy and should not expect problems in meeting its short term obligations.
FRG's Current ratio of 1.37 is in line compared to the rest of the industry. FRG outperforms 44.70% of its industry peers.
A Quick Ratio of 0.60 indicates that FRG may have some problems paying its short term obligations.
FRG has a Quick ratio of 0.60. This is comparable to the rest of the industry: FRG outperforms 50.76% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.37 | ||
| Quick Ratio | 0.6 |
3. Growth
3.1 Past
FRG shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -6.32%.
FRG shows a small growth in Revenue. In the last year, the Revenue has grown by 7.73%.
The Revenue has been growing by 90.78% on average over the past years. This is a very strong growth!
EPS 1Y (TTM)-6.32%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%-259.25%
Revenue 1Y (TTM)7.73%
Revenue growth 3Y221.37%
Revenue growth 5Y90.78%
Sales Q2Q%-5.14%
3.2 Future
Based on estimates for the next years, FRG will show a quite strong growth in Earnings Per Share. The EPS will grow by 11.08% on average per year.
Based on estimates for the next years, FRG will show a small growth in Revenue. The Revenue will grow by 3.12% on average per year.
EPS Next Y-49.12%
EPS Next 2Y-5.22%
EPS Next 3Y-8.96%
EPS Next 5Y11.08%
Revenue Next Year0.34%
Revenue Next 2Y1.48%
Revenue Next 3Y2.42%
Revenue Next 5Y3.12%
3.3 Evolution
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
FRG is valuated reasonably with a Price/Earnings ratio of 8.39.
Based on the Price/Earnings ratio, FRG is valued a bit cheaper than the industry average as 76.52% of the companies are valued more expensively.
FRG is valuated cheaply when we compare the Price/Earnings ratio to 25.89, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 9.34 indicates a reasonable valuation of FRG.
Compared to the rest of the industry, the Price/Forward Earnings ratio of FRG indicates a somewhat cheap valuation: FRG is cheaper than 72.73% of the companies listed in the same industry.
FRG is valuated cheaply when we compare the Price/Forward Earnings ratio to 34.59, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.39 | ||
| Fwd PE | 9.34 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of FRG is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 11.9 |
4.3 Compensation for Growth
A cheap valuation may be justified as FRG's earnings are expected to decrease with -8.96% in the coming years.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-5.22%
EPS Next 3Y-8.96%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 8.37%, FRG is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 5.49, FRG pays a better dividend. On top of this FRG pays more dividend than 96.21% of the companies listed in the same industry.
FRG's Dividend Yield is rather good when compared to the S&P500 average which is at 2.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 8.37% |
5.2 History
The dividend of FRG is nicely growing with an annual growth rate of 33.91%!
FRG has been paying a dividend for over 5 years, so it has already some track record.
FRG has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)33.91%
Div Incr Years3
Div Non Decr Years3
5.3 Sustainability
FRG has negative earnings and hence a negative payout ratio. The dividend may be in danger.
FRG's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP-36.91%
EPS Next 2Y-5.22%
EPS Next 3Y-8.96%
29.88
+0.03 (+0.1%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners0.05%
Inst Owner Change0%
Ins Owners25.23%
Ins Owner Change0%
Market Cap1.05B
Revenue(TTM)4.31B
Net Income(TTM)-289.50M
Analysts75
Price Target31.88 (6.69%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 8.37% |
Yearly Dividend2.97
Dividend Growth(5Y)33.91%
DP-36.91%
Div Incr Years3
Div Non Decr Years3
Ex-DateN/A
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-79.29%
Min EPS beat(2)-79.29%
Max EPS beat(2)-79.29%
EPS beat(4)1
Avg EPS beat(4)9.9%
Min EPS beat(4)-79.29%
Max EPS beat(4)126.71%
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)0
Avg Revenue beat(2)-3.29%
Min Revenue beat(2)-5.66%
Max Revenue beat(2)-0.91%
Revenue beat(4)2
Avg Revenue beat(4)0.48%
Min Revenue beat(4)-5.66%
Max Revenue beat(4)6.78%
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)0%
PT rev (3m)-15.08%
EPS NQ rev (1m)0%
EPS NQ rev (3m)10.03%
EPS NY rev (1m)0%
EPS NY rev (3m)-36.74%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-2.08%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.39 | ||
| Fwd PE | 9.34 | ||
| P/S | 0.24 | ||
| P/FCF | N/A | ||
| P/OCF | 20.26 | ||
| P/B | 4.66 | ||
| P/tB | N/A | ||
| EV/EBITDA | 11.9 |
EPS(TTM)3.56
EY11.91%
EPS(NY)3.2
Fwd EY10.7%
FCF(TTM)-0.26
FCFYN/A
OCF(TTM)1.47
OCFY4.93%
SpS122.5
BVpS6.41
TBVpS-21.94
PEG (NY)N/A
PEG (5Y)N/A
Graham NumberN/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | N/A | ||
| ROE | N/A | ||
| ROCE | N/A | ||
| ROIC | 4.68% | ||
| ROICexc | 4.88% | ||
| ROICexgc | 8.15% | ||
| OM | 3.57% | ||
| PM (TTM) | N/A | ||
| GM | 39.81% | ||
| FCFM | N/A |
ROA(3y)N/A
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)7.05%
ROIC(5y)7.75%
ROICexc(3y)7.65%
ROICexc(5y)8.86%
ROICexgc(3y)13.98%
ROICexgc(5y)14.48%
ROCE(3y)N/A
ROCE(5y)N/A
ROICexgc growth 3Y5.57%
ROICexgc growth 5Y-5.77%
ROICexc growth 3Y-0.91%
ROICexc growth 5Y-10.96%
OM growth 3Y-4.9%
OM growth 5Y-15.6%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-6.31%
GM growth 5YN/A
F-Score3
Asset Turnover1.21
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 6.97 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 6.51 | ||
| Cap/Depr | 69.71% | ||
| Cap/Sales | N/A | ||
| Interest Coverage | N/A | ||
| Cash Conversion | N/A | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.37 | ||
| Quick Ratio | 0.6 | ||
| Altman-Z | 1.63 |
F-Score3
WACC7.39%
ROIC/WACC0.63
Cap/Depr(3y)65.22%
Cap/Depr(5y)58.27%
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)-6.32%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%-259.25%
EPS Next Y-49.12%
EPS Next 2Y-5.22%
EPS Next 3Y-8.96%
EPS Next 5Y11.08%
Revenue 1Y (TTM)7.73%
Revenue growth 3Y221.37%
Revenue growth 5Y90.78%
Sales Q2Q%-5.14%
Revenue Next Year0.34%
Revenue Next 2Y1.48%
Revenue Next 3Y2.42%
Revenue Next 5Y3.12%
EBIT growth 1Y-52.42%
EBIT growth 3Y205.63%
EBIT growth 5Y61.02%
EBIT Next Year33.81%
EBIT Next 3Y16.27%
EBIT Next 5Y16.31%
FCF growth 1Y-105.67%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-73.81%
OCF growth 3YN/A
OCF growth 5YN/A
FRANCHISE GROUP INC / FRG FAQ
Can you provide the ChartMill fundamental rating for FRANCHISE GROUP INC?
ChartMill assigns a fundamental rating of 3 / 10 to FRG.
Can you provide the valuation status for FRANCHISE GROUP INC?
ChartMill assigns a valuation rating of 4 / 10 to FRANCHISE GROUP INC (FRG). This can be considered as Fairly Valued.
Can you provide the profitability details for FRANCHISE GROUP INC?
FRANCHISE GROUP INC (FRG) has a profitability rating of 2 / 10.
Can you provide the PE and PB ratios for FRG stock?
The Price/Earnings (PE) ratio for FRANCHISE GROUP INC (FRG) is 8.39 and the Price/Book (PB) ratio is 4.66.
Is the dividend of FRANCHISE GROUP INC sustainable?
The dividend rating of FRANCHISE GROUP INC (FRG) is 6 / 10 and the dividend payout ratio is -36.91%.