H2O Innovation Inc (HEO.CA) Stock Fundamental Analysis

Canada • Toronto Stock Exchange • TSX:HEO • CA4433003064

4.25 CAD
+0.01 (+0.24%)
Last: Dec 11, 2023, 07:00 PM
Fundamental Rating

4

We assign a fundamental rating of 4 out of 10 to HEO. HEO was compared to 23 industry peers in the Machinery industry. The financial health of HEO is average, but there are quite some concerns on its profitability. While showing a medium growth rate, HEO is valued expensive at the moment.


Dividend Valuation Growth Profitability Health

3

1. Profitability

1.1 Basic Checks

  • HEO had positive earnings in the past year.
  • In the past year HEO had a positive cash flow from operations.
  • The reported net income has been mixed in the past 5 years: HEO reported negative net income in multiple years.
  • Of the past 5 years HEO 4 years had a positive operating cash flow.
HEO.CA Yearly Net Income VS EBIT VS OCF VS FCFHEO.CA Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 0 10M -10M 20M

1.2 Ratios

  • The Return On Assets of HEO (-0.80%) is comparable to the rest of the industry.
  • Looking at the Return On Equity, with a value of -1.72%, HEO is in the better half of the industry, outperforming 76.67% of the companies in the same industry.
  • HEO's Return On Invested Capital of 2.50% is in line compared to the rest of the industry. HEO outperforms 56.67% of its industry peers.
  • Measured over the past 3 years, the Average Return On Invested Capital for HEO is below the industry average of 7.08%.
Industry RankSector Rank
ROA -0.8%
ROE -1.72%
ROIC 2.5%
ROA(3y)1.38%
ROA(5y)-0.38%
ROE(3y)2.63%
ROE(5y)-0.51%
ROIC(3y)3.1%
ROIC(5y)2.79%
HEO.CA Yearly ROA, ROE, ROICHEO.CA Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2016 2017 2018 2019 2020 2021 2022 2023 0 5 -5 -10

1.3 Margins

  • HEO has a Operating Margin (2.38%) which is comparable to the rest of the industry.
  • In the last couple of years the Operating Margin of HEO has declined.
  • With a Gross Margin value of 25.48%, HEO perfoms like the industry average, outperforming 50.00% of the companies in the same industry.
  • HEO's Gross Margin has improved in the last couple of years.
Industry RankSector Rank
OM 2.38%
PM (TTM) N/A
GM 25.48%
OM growth 3Y-11.23%
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-2.13%
GM growth 5Y2.59%
HEO.CA Yearly Profit, Operating, Gross MarginsHEO.CA Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2016 2017 2018 2019 2020 2021 2022 2023 0 10 20 30

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6

2. Health

2.1 Basic Checks

  • With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), HEO is destroying value.
  • HEO has about the same amout of shares outstanding than it did 1 year ago.
  • Compared to 1 year ago, HEO has a worse debt to assets ratio.
HEO.CA Yearly Shares OutstandingHEO.CA Yearly Shares OutstandingYearly Shares Outstanding 2016 2017 2018 2019 2020 2021 2022 2023 20M 40M 60M 80M
HEO.CA Yearly Total Debt VS Total AssetsHEO.CA Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2016 2017 2018 2019 2020 2021 2022 2023 50M 100M 150M 200M

2.2 Solvency

  • An Altman-Z score of 3.27 indicates that HEO is not in any danger for bankruptcy at the moment.
  • HEO's Altman-Z score of 3.27 is amongst the best of the industry. HEO outperforms 86.67% of its industry peers.
  • The Debt to FCF ratio of HEO is 4.52, which is a neutral value as it means it would take HEO, 4.52 years of fcf income to pay off all of its debts.
  • HEO's Debt to FCF ratio of 4.52 is amongst the best of the industry. HEO outperforms 90.00% of its industry peers.
  • HEO has a Debt/Equity ratio of 0.71. This is a neutral value indicating HEO is somewhat dependend on debt financing.
  • Looking at the Debt to Equity ratio, with a value of 0.71, HEO is doing worse than 63.33% of the companies in the same industry.
Industry RankSector Rank
Debt/Equity 0.71
Debt/FCF 4.52
Altman-Z 3.27
ROIC/WACC0.31
WACC8.01%
HEO.CA Yearly LT Debt VS Equity VS FCFHEO.CA Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 0 20M 40M 60M 80M

2.3 Liquidity

  • HEO has a Current Ratio of 2.10. This indicates that HEO is financially healthy and has no problem in meeting its short term obligations.
  • Looking at the Current ratio, with a value of 2.10, HEO is in the better half of the industry, outperforming 63.33% of the companies in the same industry.
  • HEO has a Quick Ratio of 1.50. This is a normal value and indicates that HEO is financially healthy and should not expect problems in meeting its short term obligations.
  • The Quick ratio of HEO (1.50) is better than 76.67% of its industry peers.
Industry RankSector Rank
Current Ratio 2.1
Quick Ratio 1.5
HEO.CA Yearly Current Assets VS Current LiabilitesHEO.CA Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2016 2017 2018 2019 2020 2021 2022 2023 20M 40M 60M 80M

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6

3. Growth

3.1 Past

  • HEO shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 2852.38%, which is quite impressive.
  • Looking at the last year, HEO shows a very strong growth in Revenue. The Revenue has grown by 26.89%.
  • HEO shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 20.50% yearly.
EPS 1Y (TTM)2852.38%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%6900%
Revenue 1Y (TTM)26.89%
Revenue growth 3Y23.77%
Revenue growth 5Y20.5%
Sales Q2Q%5.65%

3.2 Future

  • HEO is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 39.90% yearly.
  • The Revenue is expected to grow by 7.73% on average over the next years.
EPS Next Y-26.68%
EPS Next 2Y35.39%
EPS Next 3Y51.34%
EPS Next 5Y39.9%
Revenue Next Year8.64%
Revenue Next 2Y8.92%
Revenue Next 3Y8.18%
Revenue Next 5Y7.73%

3.3 Evolution

  • The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
HEO.CA Yearly Revenue VS EstimatesHEO.CA Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 100M 200M 300M 400M
HEO.CA Yearly EPS VS EstimatesHEO.CA Yearly EPS VS EstimatesYearly EPS VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 0 0.1 -0.1 0.2

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3

4. Valuation

4.1 Price/Earnings Ratio

  • A Price/Earnings ratio of 70.83 indicates a quite expensive valuation of HEO.
  • HEO's Price/Earnings is on the same level as the industry average.
  • HEO is valuated expensively when we compare the Price/Earnings ratio to 28.25, which is the current average of the S&P500 Index.
  • The Price/Forward Earnings ratio is 42.08, which means the current valuation is very expensive for HEO.
  • The rest of the industry has a similar Price/Forward Earnings ratio as HEO.
  • The average S&P500 Price/Forward Earnings ratio is at 27.50. HEO is valued rather expensively when compared to this.
Industry RankSector Rank
PE 70.83
Fwd PE 42.08
HEO.CA Price Earnings VS Forward Price EarningsHEO.CA Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 20 40 60

4.2 Price Multiples

  • HEO's Enterprise Value to EBITDA ratio is in line with the industry average.
  • Compared to the rest of the industry, the Price/Free Cash Flow ratio of HEO indicates a rather cheap valuation: HEO is cheaper than 83.33% of the companies listed in the same industry.
Industry RankSector Rank
P/FCF 23.57
EV/EBITDA 24.2
HEO.CA Per share dataHEO.CA EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0.5 1 1.5 2 2.5

4.3 Compensation for Growth

  • A more expensive valuation may be justified as HEO's earnings are expected to grow with 51.34% in the coming years.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y35.39%
EPS Next 3Y51.34%

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0

5. Dividend

5.1 Amount

  • HEO does not give a dividend.
Industry RankSector Rank
Dividend Yield N/A

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H2O Innovation Inc

TSX:HEO (12/11/2023, 7:00:00 PM)

4.25

+0.01 (+0.24%)

Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)N/A
Earnings (Next)02-10
Inst Owners5.62%
Inst Owner ChangeN/A
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap382.53M
Revenue(TTM)256.49M
Net Income(TTM)-1.73M
Analysts77.5
Price Target4.14 (-2.59%)
Short Float %N/A
Short RatioN/A
Dividend
Industry RankSector 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)0
Avg EPS beat(2)-103.3%
Min EPS beat(2)-199.01%
Max EPS beat(2)-7.59%
EPS beat(4)2
Avg EPS beat(4)-15.35%
Min EPS beat(4)-199.01%
Max EPS beat(4)129.7%
EPS beat(8)3
Avg EPS beat(8)-52.64%
EPS beat(12)4
Avg EPS beat(12)-47.8%
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)1
Avg Revenue beat(2)0.31%
Min Revenue beat(2)-6.48%
Max Revenue beat(2)7.1%
Revenue beat(4)3
Avg Revenue beat(4)5.01%
Min Revenue beat(4)-6.48%
Max Revenue beat(4)12.89%
Revenue beat(8)7
Avg Revenue beat(8)7.55%
Revenue beat(12)9
Avg Revenue beat(12)4.75%
Revenue beat(16)11
Avg Revenue beat(16)3.88%
PT rev (1m)-1.52%
PT rev (3m)8.65%
EPS NQ rev (1m)-50%
EPS NQ rev (3m)-50%
EPS NY rev (1m)-52.54%
EPS NY rev (3m)-57.58%
Revenue NQ rev (1m)-3.44%
Revenue NQ rev (3m)96282.1%
Revenue NY rev (1m)-1.24%
Revenue NY rev (3m)-0.38%
Valuation
Industry RankSector Rank
PE 70.83
Fwd PE 42.08
P/S 1.49
P/FCF 23.57
P/OCF 13.21
P/B 3.8
P/tB 19.82
EV/EBITDA 24.2
EPS(TTM)0.06
EY1.41%
EPS(NY)0.1
Fwd EY2.38%
FCF(TTM)0.18
FCFY4.24%
OCF(TTM)0.32
OCFY7.57%
SpS2.85
BVpS1.12
TBVpS0.21
PEG (NY)N/A
PEG (5Y)N/A
Graham NumberN/A
Profitability
Industry RankSector Rank
ROA -0.8%
ROE -1.72%
ROCE 3.48%
ROIC 2.5%
ROICexc 2.62%
ROICexgc 5.07%
OM 2.38%
PM (TTM) N/A
GM 25.48%
FCFM 6.33%
ROA(3y)1.38%
ROA(5y)-0.38%
ROE(3y)2.63%
ROE(5y)-0.51%
ROIC(3y)3.1%
ROIC(5y)2.79%
ROICexc(3y)3.48%
ROICexc(5y)3.12%
ROICexgc(3y)9.07%
ROICexgc(5y)8.2%
ROCE(3y)4.31%
ROCE(5y)3.95%
ROICexgc growth 3Y-16.5%
ROICexgc growth 5YN/A
ROICexc growth 3Y-9.09%
ROICexc growth 5YN/A
OM growth 3Y-11.23%
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-2.13%
GM growth 5Y2.59%
F-Score3
Asset Turnover1.18
Health
Industry RankSector Rank
Debt/Equity 0.71
Debt/FCF 4.52
Debt/EBITDA 3.85
Cap/Depr 102.5%
Cap/Sales 4.96%
Interest Coverage 1.17
Cash Conversion 156.32%
Profit Quality N/A
Current Ratio 2.1
Quick Ratio 1.5
Altman-Z 3.27
F-Score3
WACC8.01%
ROIC/WACC0.31
Cap/Depr(3y)72.35%
Cap/Depr(5y)56.15%
Cap/Sales(3y)3.58%
Cap/Sales(5y)2.75%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)2852.38%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%6900%
EPS Next Y-26.68%
EPS Next 2Y35.39%
EPS Next 3Y51.34%
EPS Next 5Y39.9%
Revenue 1Y (TTM)26.89%
Revenue growth 3Y23.77%
Revenue growth 5Y20.5%
Sales Q2Q%5.65%
Revenue Next Year8.64%
Revenue Next 2Y8.92%
Revenue Next 3Y8.18%
Revenue Next 5Y7.73%
EBIT growth 1Y14.42%
EBIT growth 3Y9.86%
EBIT growth 5YN/A
EBIT Next Year216.17%
EBIT Next 3Y64.91%
EBIT Next 5Y39.36%
FCF growth 1Y485.92%
FCF growth 3Y19.42%
FCF growth 5YN/A
OCF growth 1Y541.91%
OCF growth 3Y32.99%
OCF growth 5YN/A

H2O Innovation Inc / HEO.CA FAQ

Can you provide the ChartMill fundamental rating for H2O Innovation Inc?

ChartMill assigns a fundamental rating of 4 / 10 to HEO.CA.


Can you provide the valuation status for H2O Innovation Inc?

ChartMill assigns a valuation rating of 3 / 10 to H2O Innovation Inc (HEO.CA). This can be considered as Overvalued.


What is the profitability of HEO stock?

H2O Innovation Inc (HEO.CA) has a profitability rating of 3 / 10.


Can you provide the PE and PB ratios for HEO stock?

The Price/Earnings (PE) ratio for H2O Innovation Inc (HEO.CA) is 70.83 and the Price/Book (PB) ratio is 3.8.


How financially healthy is H2O Innovation Inc?

The financial health rating of H2O Innovation Inc (HEO.CA) is 6 / 10.