We assign a fundamental rating of 5 out of 10 to GMS. GMS was compared to 50 industry peers in the Trading Companies & Distributors industry. GMS has only an average score on both its financial health and profitability. GMS is not valued too expensively and it also shows a decent growth rate.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

GMS had positive earnings in the past year.
GMS had a positive operating cash flow in the past year.
In the past 5 years GMS has always been profitable.
GMS had a positive operating cash flow in each of the past 5 years.

1.2 Ratios

With a Return On Assets value of 2.65%, GMS perfoms like the industry average, outperforming 44.00% of the companies in the same industry.
Looking at the Return On Equity, with a value of 7.01%, GMS is in line with its industry, outperforming 46.00% of the companies in the same industry.
With a Return On Invested Capital value of 6.19%, GMS perfoms like the industry average, outperforming 56.00% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for GMS is in line with the industry average of 9.64%.
The 3 year average ROIC (10.30%) for GMS is well above the current ROIC(6.19%). The reason for the recent decline needs to be investigated.

		Industry Rank	Sector Rank
ROA	2.65%
ROE	7.01%
ROIC	6.19%

ROA(3y)6.85%

ROA(5y)6.72%

ROE(3y)17.72%

ROE(5y)18.34%

ROIC(3y)10.3%

ROIC(5y)10%

1.3 Margins

The Profit Margin of GMS (1.86%) is comparable to the rest of the industry.
GMS's Profit Margin has improved in the last couple of years.
With a Operating Margin value of 5.03%, GMS is not doing good in the industry: 60.00% of the companies in the same industry are doing better.
GMS's Operating Margin has been stable in the last couple of years.
GMS has a Gross Margin (31.15%) which is in line with its industry peers.
In the last couple of years the Gross Margin of GMS has remained more or less at the same level.

		Industry Rank	Sector Rank
OM	5.03%
PM (TTM)	1.86%
GM	31.15%

OM growth 3Y-16.26%

OM growth 5Y0.26%

PM growth 3Y-29.19%

PM growth 5Y23.84%

GM growth 3Y-0.92%

GM growth 5Y-0.98%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

GMS has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
The number of shares outstanding for GMS has been reduced compared to 1 year ago.
The number of shares outstanding for GMS has been reduced compared to 5 years ago.
The debt/assets ratio for GMS has been reduced compared to a year ago.

2.2 Solvency

GMS has an Altman-Z score of 3.45. This indicates that GMS is financially healthy and has little risk of bankruptcy at the moment.
GMS has a Altman-Z score of 3.45. This is comparable to the rest of the industry: GMS outperforms 56.00% of its industry peers.
The Debt to FCF ratio of GMS is 4.00, which is a good value as it means it would take GMS, 4.00 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 4.00, GMS is doing good in the industry, outperforming 68.00% of the companies in the same industry.
A Debt/Equity ratio of 0.87 indicates that GMS is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.87, GMS is in line with its industry, outperforming 42.00% of the companies in the same industry.

		Industry Rank	Sector Rank
Debt/Equity	0.87
Debt/FCF	4
Altman-Z	3.45

ROIC/WACC0.66

WACC9.43%

2.3 Liquidity

GMS has a Current Ratio of 2.11. This indicates that GMS is financially healthy and has no problem in meeting its short term obligations.
The Current ratio of GMS (2.11) is comparable to the rest of the industry.
A Quick Ratio of 1.31 indicates that GMS should not have too much problems paying its short term obligations.
With a Quick ratio value of 1.31, GMS perfoms like the industry average, outperforming 56.00% of the companies in the same industry.

		Industry Rank	Sector Rank
Current Ratio	2.11
Quick Ratio	1.31

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

The earnings per share for GMS have decreased strongly by -22.81% in the last year.
GMS shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 15.71% yearly.
The Revenue has decreased by -1.10% in the past year.
Measured over the past years, GMS shows a quite strong growth in Revenue. The Revenue has been growing by 11.21% on average per year.

EPS 1Y (TTM)-22.81%

EPS 3Y-6.35%

EPS 5Y15.71%

EPS Q2Q%-8.81%

Revenue 1Y (TTM)-1.1%

Revenue growth 3Y5.96%

Revenue growth 5Y11.21%

Sales Q2Q%-2.36%

3.2 Future

Based on estimates for the next years, GMS will show a quite strong growth in Earnings Per Share. The EPS will grow by 11.83% on average per year.
Based on estimates for the next years, GMS will show a small growth in Revenue. The Revenue will grow by 1.94% on average per year.

EPS Next Y2.35%

EPS Next 2Y10.15%

EPS Next 3Y11.83%

EPS Next 5YN/A

Revenue Next Year-0.22%

Revenue Next 2Y2.35%

Revenue Next 3Y1.94%

Revenue Next 5YN/A

3.3 Evolution

The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 18.36 indicates a rather expensive valuation of GMS.
GMS's Price/Earnings ratio is a bit cheaper when compared to the industry. GMS is cheaper than 72.00% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.21. GMS is valued slightly cheaper when compared to this.
Based on the Price/Forward Earnings ratio of 14.71, the valuation of GMS can be described as correct.
Based on the Price/Forward Earnings ratio, GMS is valued a bit cheaper than the industry average as 72.00% of the companies are valued more expensively.
GMS is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 25.98, which is the current average of the S&P500 Index.

		Industry Rank	Sector Rank
PE	18.36
Fwd PE	14.71

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, GMS is valued a bit cheaper than the industry average as 62.00% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of GMS indicates a rather cheap valuation: GMS is cheaper than 84.00% of the companies listed in the same industry.

		Industry Rank	Sector Rank
P/FCF	12.77
EV/EBITDA	12.36

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates GMS does not grow enough to justify the current Price/Earnings ratio.