HireRight Holdings Corporation (HRT) Stock Fundamental Analysis
NYSE:HRT - New York Stock Exchange, Inc. - US4335371070 - Common Stock - Currency: USD
We assign a fundamental rating of 4 out of 10 to HRT. HRT was compared to 82 industry peers in the Professional Services industry. There are concerns on the financial health of HRT while its profitability can be described as average. HRT is valued quite cheap, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
In the past year HRT was profitable.
In the past year HRT had a positive cash flow from operations.
In the past 5 years HRT reported 4 times negative net income.
HRT had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of HRT (-0.46%) is worse than 64.63% of its industry peers.
HRT has a Return On Equity of -1.55%. This is in the lower half of the industry: HRT underperforms 67.07% of its industry peers.
HRT's Return On Invested Capital of 4.90% is in line compared to the rest of the industry. HRT outperforms 45.12% of its industry peers.
The Average Return On Invested Capital over the past 3 years for HRT is significantly below the industry average of 12.28%.
The last Return On Invested Capital (4.90%) for HRT is above the 3 year average (4.42%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.46% | ||
| ROE | -1.55% | ||
| ROIC | 4.9% |
ROA(3y)2.29%
ROA(5y)-0.83%
ROE(3y)6.03%
ROE(5y)-7.45%
ROIC(3y)4.42%
ROIC(5y)3.25%
1.3 Margins
The Operating Margin of HRT (11.85%) is better than 82.93% of its industry peers.
In the last couple of years the Operating Margin of HRT has grown nicely.
HRT has a Gross Margin of 48.75%. This is comparable to the rest of the industry: HRT outperforms 57.32% of its industry peers.
HRT's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11.85% | ||
| PM (TTM) | N/A | ||
| GM | 48.75% |
OM growth 3Y70.3%
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y3.2%
GM growth 5YN/A
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so HRT is destroying value.
Compared to 1 year ago, HRT has less shares outstanding
Compared to 1 year ago, HRT has a worse debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 1.08, we must say that HRT is in the distress zone and has some risk of bankruptcy.
With a Altman-Z score value of 1.08, HRT is not doing good in the industry: 71.95% of the companies in the same industry are doing better.
HRT has a debt to FCF ratio of 10.42. This is a negative value and a sign of low solvency as HRT would need 10.42 years to pay back of all of its debts.
HRT has a worse Debt to FCF ratio (10.42) than 63.41% of its industry peers.
A Debt/Equity ratio of 1.61 is on the high side and indicates that HRT has dependencies on debt financing.
HRT has a Debt to Equity ratio of 1.61. This is amonst the worse of the industry: HRT underperforms 85.37% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.61 | ||
| Debt/FCF | 10.42 | ||
| Altman-Z | 1.08 |
ROIC/WACC0.54
WACC9.02%
2.3 Liquidity
HRT has a Current Ratio of 1.76. This is a normal value and indicates that HRT is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.76, HRT is in the better half of the industry, outperforming 63.41% of the companies in the same industry.
A Quick Ratio of 1.76 indicates that HRT should not have too much problems paying its short term obligations.
The Quick ratio of HRT (1.76) is better than 63.41% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.76 | ||
| Quick Ratio | 1.76 |
3. Growth
3.1 Past
The earnings per share for HRT have decreased strongly by -53.25% in the last year.
The Revenue has decreased by -8.14% in the past year.
HRT shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 10.15% yearly.
EPS 1Y (TTM)-53.25%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%22.22%
Revenue 1Y (TTM)-8.14%
Revenue growth 3Y10.15%
Revenue growth 5YN/A
Sales Q2Q%-1.28%
3.2 Future
Based on estimates for the next years, HRT will show a very strong growth in Earnings Per Share. The EPS will grow by 23.89% on average per year.
The Revenue is expected to grow by 6.63% on average over the next years.
EPS Next Y22.84%
EPS Next 2Y27.37%
EPS Next 3Y23.89%
EPS Next 5YN/A
Revenue Next Year4.35%
Revenue Next 2Y7.18%
Revenue Next 3Y6.63%
Revenue Next 5YN/A
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
HRT is valuated correctly with a Price/Earnings ratio of 12.49.
Based on the Price/Earnings ratio, HRT is valued cheaply inside the industry as 82.93% of the companies are valued more expensively.
HRT's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 28.04.
The Price/Forward Earnings ratio is 7.97, which indicates a rather cheap valuation of HRT.
Based on the Price/Forward Earnings ratio, HRT is valued cheaply inside the industry as 93.90% of the companies are valued more expensively.
HRT is valuated cheaply when we compare the Price/Forward Earnings ratio to 37.64, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.49 | ||
| Fwd PE | 7.97 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, HRT is valued a bit cheaper than 76.83% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, HRT is valued a bit cheaper than the industry average as 79.27% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 13.78 | ||
| EV/EBITDA | 9.64 |
4.3 Compensation for Growth
HRT's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
HRT's earnings are expected to grow with 23.89% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.55
PEG (5Y)N/A
EPS Next 2Y27.37%
EPS Next 3Y23.89%
5. Dividend
5.1 Amount
No dividends for HRT!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
14.36
-0.02 (-0.14%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)
Earnings (Next)
Inst Owners1.42%
Inst Owner Change0%
Ins Owners11.66%
Ins Owner Change0%
Market Cap967.15M
Analysts46.67
Price Target14.37 (0.07%)
Short Float %N/A
Short RatioN/A
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)8.84%
Min EPS beat(2)5.74%
Max EPS beat(2)11.94%
EPS beat(4)3
Avg EPS beat(4)5.01%
Min EPS beat(4)-3.39%
Max EPS beat(4)11.94%
EPS beat(8)6
Avg EPS beat(8)37.54%
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)-3.25%
Min Revenue beat(2)-3.53%
Max Revenue beat(2)-2.98%
Revenue beat(4)1
Avg Revenue beat(4)-1.69%
Min Revenue beat(4)-3.53%
Max Revenue beat(4)0.22%
Revenue beat(8)4
Avg Revenue beat(8)0.51%
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)5.62%
PT rev (3m)5.62%
EPS NQ rev (1m)-10.53%
EPS NQ rev (3m)-10.53%
EPS NY rev (1m)-7.53%
EPS NY rev (3m)3.7%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.08%
Revenue NY rev (1m)0.52%
Revenue NY rev (3m)-0.21%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.49 | ||
| Fwd PE | 7.97 | ||
| P/S | 1.34 | ||
| P/FCF | 13.78 | ||
| P/OCF | 11.25 | ||
| P/B | 2.15 | ||
| P/tB | N/A | ||
| EV/EBITDA | 9.64 |
EPS(TTM)1.15
EY8.01%
EPS(NY)1.8
Fwd EY12.54%
FCF(TTM)1.04
FCFY7.26%
OCF(TTM)1.28
OCFY8.89%
SpS10.69
BVpS6.68
TBVpS-10.44
PEG (NY)0.55
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.46% | ||
| ROE | -1.55% | ||
| ROCE | 6.21% | ||
| ROIC | 4.9% | ||
| ROICexc | 5.19% | ||
| ROICexgc | 46.9% | ||
| OM | 11.85% | ||
| PM (TTM) | N/A | ||
| GM | 48.75% | ||
| FCFM | 9.75% |
ROA(3y)2.29%
ROA(5y)-0.83%
ROE(3y)6.03%
ROE(5y)-7.45%
ROIC(3y)4.42%
ROIC(5y)3.25%
ROICexc(3y)4.88%
ROICexc(5y)3.53%
ROICexgc(3y)63.88%
ROICexgc(5y)52.87%
ROCE(3y)5.59%
ROCE(5y)4.11%
ROICexcg growth 3Y28.97%
ROICexcg growth 5YN/A
ROICexc growth 3Y88.84%
ROICexc growth 5YN/A
OM growth 3Y70.3%
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y3.2%
GM growth 5YN/A
F-Score4
Asset Turnover0.48
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.61 | ||
| Debt/FCF | 10.42 | ||
| Debt/EBITDA | 4.3 | ||
| Cap/Depr | 19.08% | ||
| Cap/Sales | 2.2% | ||
| Interest Coverage | 1.27 | ||
| Cash Conversion | 51.13% | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.76 | ||
| Quick Ratio | 1.76 | ||
| Altman-Z | 1.08 |
F-Score4
WACC9.02%
ROIC/WACC0.54
Cap/Depr(3y)19.13%
Cap/Depr(5y)18.31%
Cap/Sales(3y)1.98%
Cap/Sales(5y)2.08%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-53.25%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%22.22%
EPS Next Y22.84%
EPS Next 2Y27.37%
EPS Next 3Y23.89%
EPS Next 5YN/A
Revenue 1Y (TTM)-8.14%
Revenue growth 3Y10.15%
Revenue growth 5YN/A
Sales Q2Q%-1.28%
Revenue Next Year4.35%
Revenue Next 2Y7.18%
Revenue Next 3Y6.63%
Revenue Next 5YN/A
EBIT growth 1Y-1.86%
EBIT growth 3Y87.58%
EBIT growth 5YN/A
EBIT Next Year195.39%
EBIT Next 3Y58.42%
EBIT Next 5YN/A
FCF growth 1Y164.8%
FCF growth 3Y160.88%
FCF growth 5YN/A
OCF growth 1Y103.29%
OCF growth 3Y76.53%
OCF growth 5YN/A