INFORMATION SERVICES GROUP (III) Stock Fundamental Analysis
USA - NASDAQ:III - US45675Y1047 - Common Stock
5.77 USD
+0.12 (+2.12%)
5.77 USD
0 (0%)
We assign a fundamental rating of 5 out of 10 to III. III was compared to 87 industry peers in the IT Services industry. While III has a great health rating, its profitability is only average at the moment. III has a valuation in line with the averages, but on the other hand it scores bad on growth.
1. Profitability
1.1 Basic Checks
III had positive earnings in the past year.
III had a positive operating cash flow in the past year.
III had positive earnings in each of the past 5 years.
In the past 5 years III always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of III (3.92%) is better than 64.37% of its industry peers.
III has a better Return On Equity (8.35%) than 63.22% of its industry peers.
III has a Return On Invested Capital of 4.78%. This is comparable to the rest of the industry: III outperforms 57.47% of its industry peers.
The Average Return On Invested Capital over the past 3 years for III is significantly below the industry average of 21.42%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.92% | ||
| ROE | 8.35% | ||
| ROIC | 4.78% |
ROA(3y)3.99%
ROA(5y)3.94%
ROE(3y)9.53%
ROE(5y)9.44%
ROIC(3y)5.43%
ROIC(5y)5.93%
1.3 Margins
Looking at the Profit Margin, with a value of 3.27%, III is in line with its industry, outperforming 56.32% of the companies in the same industry.
III's Profit Margin has declined in the last couple of years.
III has a Operating Margin (5.22%) which is in line with its industry peers.
In the last couple of years the Operating Margin of III has declined.
III has a Gross Margin of 41.77%. This is in the better half of the industry: III outperforms 60.92% of its industry peers.
In the last couple of years the Gross Margin of III has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 5.22% | ||
| PM (TTM) | 3.27% | ||
| GM | 41.77% |
OM growth 3Y-38.37%
OM growth 5Y-14.34%
PM growth 3Y-40.99%
PM growth 5Y-1.58%
GM growth 3Y-0.08%
GM growth 5Y-1.49%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), III is destroying value.
Compared to 1 year ago, III has less shares outstanding
The number of shares outstanding for III has been increased compared to 5 years ago.
Compared to 1 year ago, III has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 2.62 indicates that III is not a great score, but indicates only limited risk for bankruptcy at the moment.
The Altman-Z score of III (2.62) is comparable to the rest of the industry.
III has a debt to FCF ratio of 2.31. This is a good value and a sign of high solvency as III would need 2.31 years to pay back of all of its debts.
The Debt to FCF ratio of III (2.31) is better than 71.26% of its industry peers.
III has a Debt/Equity ratio of 0.63. This is a neutral value indicating III is somewhat dependend on debt financing.
III has a Debt to Equity ratio (0.63) which is comparable to the rest of the industry.
Although III does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.63 | ||
| Debt/FCF | 2.31 | ||
| Altman-Z | 2.62 |
ROIC/WACC0.53
WACC9.07%
2.3 Liquidity
III has a Current Ratio of 2.43. This indicates that III is financially healthy and has no problem in meeting its short term obligations.
Looking at the Current ratio, with a value of 2.43, III is in the better half of the industry, outperforming 74.71% of the companies in the same industry.
A Quick Ratio of 2.43 indicates that III has no problem at all paying its short term obligations.
With a decent Quick ratio value of 2.43, III is doing good in the industry, outperforming 74.71% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.43 | ||
| Quick Ratio | 2.43 |
3. Growth
3.1 Past
The earnings per share for III have decreased by 0.00% in the last year.
III shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -7.16% yearly.
Looking at the last year, III shows a decrease in Revenue. The Revenue has decreased by -9.86% in the last year.
III shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -1.41% yearly.
EPS 1Y (TTM)0%
EPS 3Y-23.11%
EPS 5Y-7.16%
EPS Q2Q%0%
Revenue 1Y (TTM)-9.86%
Revenue growth 3Y-3.77%
Revenue growth 5Y-1.41%
Sales Q2Q%-4.2%
3.2 Future
The Earnings Per Share is expected to grow by 33.70% on average over the next years. This is a very strong growth
Based on estimates for the next years, III will show a small growth in Revenue. The Revenue will grow by 1.47% on average per year.
EPS Next Y53.52%
EPS Next 2Y33.7%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year-1.79%
Revenue Next 2Y1.47%
Revenue Next 3YN/A
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 22.19 indicates a rather expensive valuation of III.
III's Price/Earnings ratio is a bit cheaper when compared to the industry. III is cheaper than 62.07% of the companies in the same industry.
III's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.86.
Based on the Price/Forward Earnings ratio of 16.14, the valuation of III can be described as correct.
Based on the Price/Forward Earnings ratio, III is valued a bit cheaper than the industry average as 71.26% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of III to the average of the S&P500 Index (23.32), we can say III is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.19 | ||
| Fwd PE | 16.14 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of III is on the same level as its industry peers.
III's Price/Free Cash Flow ratio is rather cheap when compared to the industry. III is cheaper than 89.66% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.84 | ||
| EV/EBITDA | 17.76 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
III's earnings are expected to grow with 33.70% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.41
PEG (5Y)N/A
EPS Next 2Y33.7%
EPS Next 3YN/A
5. Dividend
5.1 Amount
III has a Yearly Dividend Yield of 3.19%. Purely for dividend investing, there may be better candidates out there.
III's Dividend Yield is rather good when compared to the industry average which is at 2.48. III pays more dividend than 97.70% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.44, III pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.19% |
5.2 History
III has been paying a dividend for over 5 years, so it has already some track record.
III has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)N/A
Div Incr Years3
Div Non Decr Years3
5.3 Sustainability
146.02% of the earnings are spent on dividend by III. This is not a sustainable payout ratio.
DP146.02%
EPS Next 2Y33.7%
EPS Next 3YN/A
5.77
+0.12 (+2.12%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners64.36%
Inst Owner Change0%
Ins Owners15.88%
Ins Owner Change1.11%
Market Cap278.11M
Analysts85.71
Price Target6.69 (15.94%)
Short Float %0.94%
Short Ratio1.32
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.19% |
Yearly Dividend0.19
Dividend Growth(5Y)N/A
DP146.02%
Div Incr Years3
Div Non Decr Years3
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)17.76%
Min EPS beat(2)15.51%
Max EPS beat(2)20.01%
EPS beat(4)3
Avg EPS beat(4)10.68%
Min EPS beat(4)-11.6%
Max EPS beat(4)20.01%
EPS beat(8)5
Avg EPS beat(8)-3.29%
EPS beat(12)9
Avg EPS beat(12)4.74%
EPS beat(16)13
Avg EPS beat(16)14.39%
Revenue beat(2)2
Avg Revenue beat(2)1.18%
Min Revenue beat(2)0.77%
Max Revenue beat(2)1.59%
Revenue beat(4)3
Avg Revenue beat(4)0.48%
Min Revenue beat(4)-0.7%
Max Revenue beat(4)1.59%
Revenue beat(8)3
Avg Revenue beat(8)-1.7%
Revenue beat(12)5
Avg Revenue beat(12)-1.17%
Revenue beat(16)8
Avg Revenue beat(16)-0.62%
PT rev (1m)11.7%
PT rev (3m)11.7%
EPS NQ rev (1m)0%
EPS NQ rev (3m)11.11%
EPS NY rev (1m)3.05%
EPS NY rev (3m)7.04%
Revenue NQ rev (1m)0.05%
Revenue NQ rev (3m)0.65%
Revenue NY rev (1m)0.16%
Revenue NY rev (3m)0.85%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.19 | ||
| Fwd PE | 16.14 | ||
| P/S | 1.16 | ||
| P/FCF | 10.84 | ||
| P/OCF | 9.85 | ||
| P/B | 2.96 | ||
| P/tB | 76.49 | ||
| EV/EBITDA | 17.76 |
EPS(TTM)0.26
EY4.51%
EPS(NY)0.36
Fwd EY6.2%
FCF(TTM)0.53
FCFY9.22%
OCF(TTM)0.59
OCFY10.16%
SpS4.98
BVpS1.95
TBVpS0.08
PEG (NY)0.41
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.92% | ||
| ROE | 8.35% | ||
| ROCE | 7.68% | ||
| ROIC | 4.78% | ||
| ROICexc | 5.66% | ||
| ROICexgc | 16.44% | ||
| OM | 5.22% | ||
| PM (TTM) | 3.27% | ||
| GM | 41.77% | ||
| FCFM | 10.68% |
ROA(3y)3.99%
ROA(5y)3.94%
ROE(3y)9.53%
ROE(5y)9.44%
ROIC(3y)5.43%
ROIC(5y)5.93%
ROICexc(3y)6.35%
ROICexc(5y)7.4%
ROICexgc(3y)18.57%
ROICexgc(5y)26.58%
ROCE(3y)8.72%
ROCE(5y)9.53%
ROICexcg growth 3Y-51.07%
ROICexcg growth 5Y-13.92%
ROICexc growth 3Y-42.19%
ROICexc growth 5Y-13.71%
OM growth 3Y-38.37%
OM growth 5Y-14.34%
PM growth 3Y-40.99%
PM growth 5Y-1.58%
GM growth 3Y-0.08%
GM growth 5Y-1.49%
F-Score9
Asset Turnover1.2
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.63 | ||
| Debt/FCF | 2.31 | ||
| Debt/EBITDA | 3.37 | ||
| Cap/Depr | 51.58% | ||
| Cap/Sales | 1.08% | ||
| Interest Coverage | 2.54 | ||
| Cash Conversion | 160.77% | ||
| Profit Quality | 326.29% | ||
| Current Ratio | 2.43 | ||
| Quick Ratio | 2.43 | ||
| Altman-Z | 2.62 |
F-Score9
WACC9.07%
ROIC/WACC0.53
Cap/Depr(3y)55.54%
Cap/Depr(5y)45.84%
Cap/Sales(3y)1.17%
Cap/Sales(5y)0.97%
Profit Quality(3y)260.97%
Profit Quality(5y)513.35%
High Growth Momentum
Growth
EPS 1Y (TTM)0%
EPS 3Y-23.11%
EPS 5Y-7.16%
EPS Q2Q%0%
EPS Next Y53.52%
EPS Next 2Y33.7%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)-9.86%
Revenue growth 3Y-3.77%
Revenue growth 5Y-1.41%
Sales Q2Q%-4.2%
Revenue Next Year-1.79%
Revenue Next 2Y1.47%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y215.34%
EBIT growth 3Y-40.69%
EBIT growth 5Y-15.55%
EBIT Next Year371.91%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y661.13%
FCF growth 3Y-24.52%
FCF growth 5Y-1.66%
OCF growth 1Y399.03%
OCF growth 3Y-22.05%
OCF growth 5Y-0.57%