GATES INDUSTRIAL CORP PLC (GTES) Stock Fundamental Analysis
NYSE:GTES - New York Stock Exchange, Inc. - GB00BD9G2S12 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to GTES. GTES was compared to 128 industry peers in the Machinery industry. GTES has an average financial health and profitability rating. GTES has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
GTES had positive earnings in the past year.
In the past year GTES had a positive cash flow from operations.
Each year in the past 5 years GTES has been profitable.
In the past 5 years GTES always reported a positive cash flow from operatings.
1.2 Ratios
GTES has a Return On Assets (3.15%) which is in line with its industry peers.
GTES has a Return On Equity of 6.99%. This is comparable to the rest of the industry: GTES outperforms 42.97% of its industry peers.
GTES has a Return On Invested Capital of 6.52%. This is comparable to the rest of the industry: GTES outperforms 45.31% of its industry peers.
The Average Return On Invested Capital over the past 3 years for GTES is below the industry average of 10.69%.
The 3 year average ROIC (5.94%) for GTES is below the current ROIC(6.52%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.15% | ||
| ROE | 6.99% | ||
| ROIC | 6.52% |
ROA(3y)3.05%
ROA(5y)2.83%
ROE(3y)6.93%
ROE(5y)6.64%
ROIC(3y)5.94%
ROIC(5y)5.37%
1.3 Margins
GTES has a Profit Margin (6.39%) which is in line with its industry peers.
GTES's Profit Margin has declined in the last couple of years.
GTES's Operating Margin of 15.09% is fine compared to the rest of the industry. GTES outperforms 71.09% of its industry peers.
In the last couple of years the Operating Margin of GTES has grown nicely.
GTES's Gross Margin of 40.77% is fine compared to the rest of the industry. GTES outperforms 76.56% of its industry peers.
GTES's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 15.09% | ||
| PM (TTM) | 6.39% | ||
| GM | 40.77% |
OM growth 3Y1.81%
OM growth 5Y5.56%
PM growth 3Y-12.55%
PM growth 5Y-23.86%
GM growth 3Y1.68%
GM growth 5Y1.85%
2. Health
2.1 Basic Checks
GTES has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for GTES has been reduced compared to 1 year ago.
The number of shares outstanding for GTES has been reduced compared to 5 years ago.
GTES has a worse debt/assets ratio than last year.
2.2 Solvency
GTES has an Altman-Z score of 2.24. This is not the best score and indicates that GTES is in the grey zone with still only limited risk for bankruptcy at the moment.
GTES has a Altman-Z score of 2.24. This is in the lower half of the industry: GTES underperforms 66.41% of its industry peers.
The Debt to FCF ratio of GTES is 7.98, which is on the high side as it means it would take GTES, 7.98 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of GTES (7.98) is comparable to the rest of the industry.
GTES has a Debt/Equity ratio of 0.74. This is a neutral value indicating GTES is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.74, GTES is not doing good in the industry: 70.31% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.74 | ||
| Debt/FCF | 7.98 | ||
| Altman-Z | 2.24 |
ROIC/WACC0.68
WACC9.56%
2.3 Liquidity
GTES has a Current Ratio of 3.33. This indicates that GTES is financially healthy and has no problem in meeting its short term obligations.
Looking at the Current ratio, with a value of 3.33, GTES belongs to the top of the industry, outperforming 81.25% of the companies in the same industry.
GTES has a Quick Ratio of 2.35. This indicates that GTES is financially healthy and has no problem in meeting its short term obligations.
GTES has a better Quick ratio (2.35) than 79.69% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.33 | ||
| Quick Ratio | 2.35 |
3. Growth
3.1 Past
GTES shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 0.00%.
Measured over the past 5 years, GTES shows a small growth in Earnings Per Share. The EPS has been growing by 7.44% on average per year.
GTES shows a decrease in Revenue. In the last year, the revenue decreased by -4.01%.
GTES shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 2.00% yearly.
EPS 1Y (TTM)0%
EPS 3Y-0.24%
EPS 5Y7.44%
EPS Q2Q%16.13%
Revenue 1Y (TTM)-4.01%
Revenue growth 3Y-0.64%
Revenue growth 5Y2%
Sales Q2Q%-1.74%
3.2 Future
The Earnings Per Share is expected to grow by 11.42% on average over the next years. This is quite good.
The Revenue is expected to grow by 2.53% on average over the next years.
EPS Next Y6.99%
EPS Next 2Y11.57%
EPS Next 3Y11.42%
EPS Next 5YN/A
Revenue Next Year-0.55%
Revenue Next 2Y1.94%
Revenue Next 3Y2.53%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 15.70 indicates a correct valuation of GTES.
Compared to the rest of the industry, the Price/Earnings ratio of GTES indicates a somewhat cheap valuation: GTES is cheaper than 74.22% of the companies listed in the same industry.
GTES is valuated rather cheaply when we compare the Price/Earnings ratio to 26.59, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 13.07, the valuation of GTES can be described as correct.
Compared to the rest of the industry, the Price/Forward Earnings ratio of GTES indicates a somewhat cheap valuation: GTES is cheaper than 78.91% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of GTES to the average of the S&P500 Index (22.39), we can say GTES is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.7 | ||
| Fwd PE | 13.07 |
4.2 Price Multiples
GTES's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. GTES is cheaper than 72.66% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, GTES is valued a bit cheaper than 65.63% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.46 | ||
| EV/EBITDA | 10.13 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of GTES may justify a higher PE ratio.
PEG (NY)2.25
PEG (5Y)2.11
EPS Next 2Y11.57%
EPS Next 3Y11.42%
5. Dividend
5.1 Amount
GTES does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
22.13
+0.17 (+0.77%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners109.24%
Inst Owner Change-2.8%
Ins Owners1.06%
Ins Owner Change33.19%
Market Cap5.70B
Analysts82.35
Price Target24.48 (10.62%)
Short Float %2.64%
Short Ratio2.82
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)6.73%
Min EPS beat(2)6.72%
Max EPS beat(2)6.74%
EPS beat(4)3
Avg EPS beat(4)4.46%
Min EPS beat(4)-1.33%
Max EPS beat(4)6.74%
EPS beat(8)6
Avg EPS beat(8)8.45%
EPS beat(12)8
Avg EPS beat(12)6.9%
EPS beat(16)11
Avg EPS beat(16)9.49%
Revenue beat(2)1
Avg Revenue beat(2)-0.4%
Min Revenue beat(2)-1.79%
Max Revenue beat(2)0.98%
Revenue beat(4)1
Avg Revenue beat(4)-1.47%
Min Revenue beat(4)-3.07%
Max Revenue beat(4)0.98%
Revenue beat(8)1
Avg Revenue beat(8)-1.83%
Revenue beat(12)2
Avg Revenue beat(12)-1.81%
Revenue beat(16)3
Avg Revenue beat(16)-1.63%
PT rev (1m)3.53%
PT rev (3m)-8.33%
EPS NQ rev (1m)0.56%
EPS NQ rev (3m)-2.64%
EPS NY rev (1m)-0.12%
EPS NY rev (3m)-1.45%
Revenue NQ rev (1m)0.32%
Revenue NQ rev (3m)-0.12%
Revenue NY rev (1m)-0.14%
Revenue NY rev (3m)0.26%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.7 | ||
| Fwd PE | 13.07 | ||
| P/S | 1.68 | ||
| P/FCF | 19.46 | ||
| P/OCF | 13.98 | ||
| P/B | 1.84 | ||
| P/tB | N/A | ||
| EV/EBITDA | 10.13 |
EPS(TTM)1.41
EY6.37%
EPS(NY)1.69
Fwd EY7.65%
FCF(TTM)1.14
FCFY5.14%
OCF(TTM)1.58
OCFY7.15%
SpS13.16
BVpS12.04
TBVpS-0.25
PEG (NY)2.25
PEG (5Y)2.11
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.15% | ||
| ROE | 6.99% | ||
| ROCE | 8.29% | ||
| ROIC | 6.52% | ||
| ROICexc | 7.28% | ||
| ROICexgc | 17% | ||
| OM | 15.09% | ||
| PM (TTM) | 6.39% | ||
| GM | 40.77% | ||
| FCFM | 8.64% |
ROA(3y)3.05%
ROA(5y)2.83%
ROE(3y)6.93%
ROE(5y)6.64%
ROIC(3y)5.94%
ROIC(5y)5.37%
ROICexc(3y)6.65%
ROICexc(5y)5.97%
ROICexgc(3y)16.26%
ROICexgc(5y)15.01%
ROCE(3y)7.56%
ROCE(5y)6.83%
ROICexcg growth 3Y2.48%
ROICexcg growth 5Y7.25%
ROICexc growth 3Y5%
ROICexc growth 5Y10.47%
OM growth 3Y1.81%
OM growth 5Y5.56%
PM growth 3Y-12.55%
PM growth 5Y-23.86%
GM growth 3Y1.68%
GM growth 5Y1.85%
F-Score6
Asset Turnover0.49
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.74 | ||
| Debt/FCF | 7.98 | ||
| Debt/EBITDA | 3.18 | ||
| Cap/Depr | 53.52% | ||
| Cap/Sales | 3.38% | ||
| Interest Coverage | 4.14 | ||
| Cash Conversion | 56.15% | ||
| Profit Quality | 135.13% | ||
| Current Ratio | 3.33 | ||
| Quick Ratio | 2.35 | ||
| Altman-Z | 2.24 |
F-Score6
WACC9.56%
ROIC/WACC0.68
Cap/Depr(3y)40.69%
Cap/Depr(5y)38.4%
Cap/Sales(3y)2.53%
Cap/Sales(5y)2.5%
Profit Quality(3y)132.29%
Profit Quality(5y)160.12%
High Growth Momentum
Growth
EPS 1Y (TTM)0%
EPS 3Y-0.24%
EPS 5Y7.44%
EPS Q2Q%16.13%
EPS Next Y6.99%
EPS Next 2Y11.57%
EPS Next 3Y11.42%
EPS Next 5YN/A
Revenue 1Y (TTM)-4.01%
Revenue growth 3Y-0.64%
Revenue growth 5Y2%
Sales Q2Q%-1.74%
Revenue Next Year-0.55%
Revenue Next 2Y1.94%
Revenue Next 3Y2.53%
Revenue Next 5YN/A
EBIT growth 1Y0.71%
EBIT growth 3Y1.16%
EBIT growth 5Y7.67%
EBIT Next Year28.21%
EBIT Next 3Y14.33%
EBIT Next 5YN/A
FCF growth 1Y-13.82%
FCF growth 3Y-2.61%
FCF growth 5Y0.53%
OCF growth 1Y-3.73%
OCF growth 3Y-0.24%
OCF growth 5Y1.7%