GDS HOLDINGS LTD - ADR (GDS) Stock Fundamental Analysis
USA - NASDAQ:GDS - US36165L1089 - ADR
33.69 USD
-2.05 (-5.74%)
33.95 USD
+0.26 (+0.77%)
We assign a fundamental rating of 4 out of 10 to GDS. GDS was compared to 86 industry peers in the IT Services industry. While GDS is still in line with the averages on profitability rating, there are concerns on its financial health. GDS is valied quite expensively at the moment, while it does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year GDS was profitable.
In the past year GDS had a positive cash flow from operations.
In the past 5 years GDS reported 4 times negative net income.
In the past 5 years GDS always reported a positive cash flow from operatings.
1.2 Ratios
GDS has a better Return On Assets (5.85%) than 70.93% of its industry peers.
GDS has a better Return On Equity (18.19%) than 81.40% of its industry peers.
GDS has a Return On Invested Capital (1.57%) which is comparable to the rest of the industry.
Measured over the past 3 years, the Average Return On Invested Capital for GDS is significantly below the industry average of 21.42%.
The 3 year average ROIC (1.07%) for GDS is below the current ROIC(1.57%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.85% | ||
| ROE | 18.19% | ||
| ROIC | 1.57% |
ROA(3y)-1.09%
ROA(5y)-1.28%
ROE(3y)-4.57%
ROE(5y)-4.33%
ROIC(3y)1.07%
ROIC(5y)0.99%
1.3 Margins
GDS has a Profit Margin of 44.16%. This is amongst the best in the industry. GDS outperforms 98.84% of its industry peers.
GDS's Operating Margin of 13.31% is fine compared to the rest of the industry. GDS outperforms 76.74% of its industry peers.
In the last couple of years the Operating Margin of GDS has remained more or less at the same level.
With a Gross Margin value of 22.35%, GDS is not doing good in the industry: 79.07% of the companies in the same industry are doing better.
GDS's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 13.31% | ||
| PM (TTM) | 44.16% | ||
| GM | 22.35% |
OM growth 3Y15.28%
OM growth 5Y-0.84%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-1.83%
GM growth 5Y-3.17%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so GDS is destroying value.
The number of shares outstanding for GDS has been increased compared to 1 year ago.
GDS has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, GDS has a worse debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 0.78, we must say that GDS is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of GDS (0.78) is worse than 73.26% of its industry peers.
GDS has a debt to FCF ratio of 38.87. This is a negative value and a sign of low solvency as GDS would need 38.87 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 38.87, GDS is in line with its industry, outperforming 41.86% of the companies in the same industry.
GDS has a Debt/Equity ratio of 1.65. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of GDS (1.65) is worse than 74.42% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.65 | ||
| Debt/FCF | 38.87 | ||
| Altman-Z | 0.78 |
ROIC/WACC0.3
WACC5.26%
2.3 Liquidity
A Current Ratio of 2.00 indicates that GDS should not have too much problems paying its short term obligations.
GDS has a Current ratio of 2.00. This is comparable to the rest of the industry: GDS outperforms 58.14% of its industry peers.
A Quick Ratio of 2.00 indicates that GDS should not have too much problems paying its short term obligations.
The Quick ratio of GDS (2.00) is better than 60.47% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2 | ||
| Quick Ratio | 2 |
3. Growth
3.1 Past
GDS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 103.46%, which is quite impressive.
The Revenue has decreased by -0.36% in the past year.
Measured over the past years, GDS shows a very strong growth in Revenue. The Revenue has been growing by 20.15% on average per year.
EPS 1Y (TTM)103.46%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%62.5%
Revenue 1Y (TTM)-0.36%
Revenue growth 3Y9.7%
Revenue growth 5Y20.15%
Sales Q2Q%2.62%
3.2 Future
GDS is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 25.53% yearly.
GDS is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 11.57% yearly.
EPS Next Y171.21%
EPS Next 2Y38.08%
EPS Next 3Y32.11%
EPS Next 5Y25.53%
Revenue Next Year-0.57%
Revenue Next 2Y6.54%
Revenue Next 3Y8.81%
Revenue Next 5Y11.57%
3.3 Evolution
The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 1123.00, the valuation of GDS can be described as expensive.
Compared to the rest of the industry, the Price/Earnings ratio of GDS indicates a slightly more expensive valuation: GDS is more expensive than 61.63% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.50, GDS is valued quite expensively.
GDS is expected to report negative earnings next year, which makes the Forward Price/Earnings Ratio negative.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 1123 | ||
| Fwd PE | N/A |
4.2 Price Multiples
GDS's Enterprise Value to EBITDA is on the same level as the industry average.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of GDS is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 38.52 | ||
| EV/EBITDA | 17.77 |
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 GDS's earnings are expected to grow with 32.11% in the coming years.
PEG (NY)6.56
PEG (5Y)N/A
EPS Next 2Y38.08%
EPS Next 3Y32.11%
5. Dividend
5.1 Amount
GDS does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
33.69
-2.05 (-5.74%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners37.31%
Inst Owner Change-0.01%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap6.45B
Analysts88
Price Target41.35 (22.74%)
Short Float %5.78%
Short Ratio3.01
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly Dividend0.04
Dividend Growth(5Y)9.36%
DP1.17%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)414.54%
Min EPS beat(2)26.47%
Max EPS beat(2)802.61%
EPS beat(4)4
Avg EPS beat(4)218.78%
Min EPS beat(4)5.7%
Max EPS beat(4)802.61%
EPS beat(8)8
Avg EPS beat(8)122.1%
EPS beat(12)11
Avg EPS beat(12)92.58%
EPS beat(16)12
Avg EPS beat(16)61.72%
Revenue beat(2)1
Avg Revenue beat(2)-1.91%
Min Revenue beat(2)-4.55%
Max Revenue beat(2)0.74%
Revenue beat(4)1
Avg Revenue beat(4)-1.71%
Min Revenue beat(4)-4.55%
Max Revenue beat(4)0.74%
Revenue beat(8)1
Avg Revenue beat(8)-2.05%
Revenue beat(12)1
Avg Revenue beat(12)-2.16%
Revenue beat(16)2
Avg Revenue beat(16)-1.83%
PT rev (1m)15.51%
PT rev (3m)39.81%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-183.86%
EPS NY rev (1m)131.94%
EPS NY rev (3m)197.85%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-1.49%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 1123 | ||
| Fwd PE | N/A | ||
| P/S | 4.39 | ||
| P/FCF | 38.52 | ||
| P/OCF | 14.53 | ||
| P/B | 1.81 | ||
| P/tB | 2.32 | ||
| EV/EBITDA | 17.77 |
EPS(TTM)0.03
EY0.09%
EPS(NY)-0.08
Fwd EYN/A
FCF(TTM)0.87
FCFY2.6%
OCF(TTM)2.32
OCFY6.88%
SpS7.68
BVpS18.65
TBVpS14.52
PEG (NY)6.56
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.85% | ||
| ROE | 18.19% | ||
| ROCE | 1.99% | ||
| ROIC | 1.57% | ||
| ROICexc | 1.93% | ||
| ROICexgc | 2.14% | ||
| OM | 13.31% | ||
| PM (TTM) | 44.16% | ||
| GM | 22.35% | ||
| FCFM | 11.39% |
ROA(3y)-1.09%
ROA(5y)-1.28%
ROE(3y)-4.57%
ROE(5y)-4.33%
ROIC(3y)1.07%
ROIC(5y)0.99%
ROICexc(3y)1.21%
ROICexc(5y)1.21%
ROICexgc(3y)1.38%
ROICexgc(5y)1.37%
ROCE(3y)1.38%
ROCE(5y)1.29%
ROICexcg growth 3Y19.95%
ROICexcg growth 5Y-1.85%
ROICexc growth 3Y22.25%
ROICexc growth 5Y-1.95%
OM growth 3Y15.28%
OM growth 5Y-0.84%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-1.83%
GM growth 5Y-3.17%
F-Score6
Asset Turnover0.13
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.65 | ||
| Debt/FCF | 38.87 | ||
| Debt/EBITDA | 9.07 | ||
| Cap/Depr | 61.16% | ||
| Cap/Sales | 18.8% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 68.52% | ||
| Profit Quality | 25.78% | ||
| Current Ratio | 2 | ||
| Quick Ratio | 2 | ||
| Altman-Z | 0.78 |
F-Score6
WACC5.26%
ROIC/WACC0.3
Cap/Depr(3y)154.46%
Cap/Depr(5y)268.5%
Cap/Sales(3y)51.51%
Cap/Sales(5y)84.82%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)103.46%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%62.5%
EPS Next Y171.21%
EPS Next 2Y38.08%
EPS Next 3Y32.11%
EPS Next 5Y25.53%
Revenue 1Y (TTM)-0.36%
Revenue growth 3Y9.7%
Revenue growth 5Y20.15%
Sales Q2Q%2.62%
Revenue Next Year-0.57%
Revenue Next 2Y6.54%
Revenue Next 3Y8.81%
Revenue Next 5Y11.57%
EBIT growth 1Y102.23%
EBIT growth 3Y26.47%
EBIT growth 5Y19.15%
EBIT Next Year416.52%
EBIT Next 3Y85.66%
EBIT Next 5Y52.83%
FCF growth 1Y115.72%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y51.62%
OCF growth 3Y17.29%
OCF growth 5Y45.88%