INFORMATION SERVICES GROUP (III) Stock Fundamental Analysis
NASDAQ:III - Nasdaq - US45675Y1047 - Common Stock - Currency: USD
III gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 82 industry peers in the IT Services industry. Both the profitability and the financial health of III get a neutral evaluation. Nothing too spectacular is happening here. III has a bad growth rate and is valued cheaply.
1. Profitability
1.1 Basic Checks
In the past year III was profitable.
In the past year III had a positive cash flow from operations.
III had positive earnings in each of the past 5 years.
Each year in the past 5 years III had a positive operating cash flow.
1.2 Ratios
III has a Return On Assets (3.81%) which is comparable to the rest of the industry.
The Return On Equity of III (8.12%) is comparable to the rest of the industry.
With a Return On Invested Capital value of 4.35%, III perfoms like the industry average, outperforming 54.88% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for III is significantly below the industry average of 22.70%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.81% | ||
| ROE | 8.12% | ||
| ROIC | 4.35% |
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
III has a Profit Margin (3.18%) which is in line with its industry peers.
III's Profit Margin has declined in the last couple of years.
III has a Operating Margin (4.74%) which is comparable to the rest of the industry.
In the last couple of years the Operating Margin of III has declined.
Looking at the Gross Margin, with a value of 41.05%, III is in the better half of the industry, outperforming 62.20% of the companies in the same industry.
III's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.74% | ||
| PM (TTM) | 3.18% | ||
| GM | 41.05% |
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
III 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 III has been reduced compared to 1 year ago.
III has more shares outstanding than it did 5 years ago.
The debt/assets ratio for III has been reduced compared to a year ago.
2.2 Solvency
III has an Altman-Z score of 2.18. This is not the best score and indicates that III is in the grey zone with still only limited risk for bankruptcy at the moment.
III's Altman-Z score of 2.18 is in line compared to the rest of the industry. III outperforms 42.68% of its industry peers.
III has a debt to FCF ratio of 3.73. This is a good value and a sign of high solvency as III would need 3.73 years to pay back of all of its debts.
III has a Debt to FCF ratio of 3.73. This is comparable to the rest of the industry: III outperforms 59.76% of its industry peers.
III has a Debt/Equity ratio of 0.62. This is a neutral value indicating III is somewhat dependend on debt financing.
III has a Debt to Equity ratio (0.62) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.62 | ||
| Debt/FCF | 3.73 | ||
| Altman-Z | 2.18 |
ROIC/WACC0.53
WACC8.13%
2.3 Liquidity
III has a Current Ratio of 2.42. This indicates that III is financially healthy and has no problem in meeting its short term obligations.
III has a Current ratio of 2.42. This is in the better half of the industry: III outperforms 74.39% of its industry peers.
A Quick Ratio of 2.42 indicates that III has no problem at all paying its short term obligations.
III has a Quick ratio of 2.42. This is in the better half of the industry: III outperforms 74.39% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.42 | ||
| Quick Ratio | 2.42 |
3. Growth
3.1 Past
The earnings per share for III have decreased strongly by -10.34% in the last year.
The Earnings Per Share has been decreasing by -7.16% on average over the past years.
III shows a very negative growth in Revenue. In the last year, the Revenue has decreased by -12.26%.
The Revenue has been decreasing by -1.41% on average over the past years.
EPS 1Y (TTM)-10.34%
EPS 3Y-23.11%
EPS 5Y-7.16%
EPS Q2Q%600%
Revenue 1Y (TTM)-12.26%
Revenue growth 3Y-3.77%
Revenue growth 5Y-1.41%
Sales Q2Q%-7.29%
3.2 Future
Based on estimates for the next years, III will show a very strong growth in Earnings Per Share. The EPS will grow by 31.03% on average per year.
The Revenue is expected to grow by 1.16% on average over the next years.
EPS Next Y43.42%
EPS Next 2Y31.03%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year-2.62%
Revenue Next 2Y1.16%
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 16.15 indicates a correct valuation of III.
69.51% of the companies in the same industry are more expensive than III, based on the Price/Earnings ratio.
III's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 26.82.
III is valuated correctly with a Price/Forward Earnings ratio of 12.23.
III's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. III is cheaper than 79.27% of the companies in the same industry.
III is valuated cheaply when we compare the Price/Forward Earnings ratio to 36.21, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.15 | ||
| Fwd PE | 12.23 |
4.2 Price Multiples
III's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. III is cheaper than 62.20% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, III is valued cheaper than 86.59% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.76 | ||
| EV/EBITDA | 14.51 |
4.3 Compensation for Growth
III's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
A more expensive valuation may be justified as III's earnings are expected to grow with 31.03% in the coming years.
PEG (NY)0.37
PEG (5Y)N/A
EPS Next 2Y31.03%
EPS Next 3YN/A
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.18%, III is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 2.47, III pays a better dividend. On top of this III pays more dividend than 97.56% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.39, III pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.18% |
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
119.76% of the earnings are spent on dividend by III. This is not a sustainable payout ratio.
DP119.76%
EPS Next 2Y31.03%
EPS Next 3YN/A
4.2
-0.11 (-2.55%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners61.41%
Inst Owner Change-0.03%
Ins Owners15.94%
Ins Owner Change1.45%
Market Cap202.44M
Analysts85.71
Price Target5.99 (42.62%)
Short Float %0.68%
Short Ratio1.09
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.18% |
Yearly Dividend0.19
Dividend Growth(5Y)N/A
DP119.76%
Div Incr Years3
Div Non Decr Years3
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)17.16%
Min EPS beat(2)15.51%
Max EPS beat(2)18.81%
EPS beat(4)3
Avg EPS beat(4)16.68%
Min EPS beat(4)-11.6%
Max EPS beat(4)44.01%
EPS beat(8)5
Avg EPS beat(8)-3.81%
EPS beat(12)9
Avg EPS beat(12)7%
EPS beat(16)13
Avg EPS beat(16)17.89%
Revenue beat(2)1
Avg Revenue beat(2)0.03%
Min Revenue beat(2)-0.7%
Max Revenue beat(2)0.77%
Revenue beat(4)2
Avg Revenue beat(4)-0.63%
Min Revenue beat(4)-2.87%
Max Revenue beat(4)0.77%
Revenue beat(8)2
Avg Revenue beat(8)-1.97%
Revenue beat(12)4
Avg Revenue beat(12)-1.74%
Revenue beat(16)8
Avg Revenue beat(16)-0.31%
PT rev (1m)0%
PT rev (3m)10.59%
EPS NQ rev (1m)0%
EPS NQ rev (3m)6.25%
EPS NY rev (1m)0%
EPS NY rev (3m)7.58%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.15%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.24%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.15 | ||
| Fwd PE | 12.23 | ||
| P/S | 0.83 | ||
| P/FCF | 12.76 | ||
| P/OCF | 10.94 | ||
| P/B | 2.13 | ||
| P/tB | 45.7 | ||
| EV/EBITDA | 14.51 |
EPS(TTM)0.26
EY6.19%
EPS(NY)0.34
Fwd EY8.18%
FCF(TTM)0.33
FCFY7.84%
OCF(TTM)0.38
OCFY9.14%
SpS5.04
BVpS1.97
TBVpS0.09
PEG (NY)0.37
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.81% | ||
| ROE | 8.12% | ||
| ROCE | 6.98% | ||
| ROIC | 4.35% | ||
| ROICexc | 4.95% | ||
| ROICexgc | 13.19% | ||
| OM | 4.74% | ||
| PM (TTM) | 3.18% | ||
| GM | 41.05% | ||
| FCFM | 6.53% |
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 | 0.62 | ||
| Debt/FCF | 3.73 | ||
| Debt/EBITDA | 3.48 | ||
| Cap/Depr | 48.2% | ||
| Cap/Sales | 1.09% | ||
| Interest Coverage | 2.17 | ||
| Cash Conversion | 108.81% | ||
| Profit Quality | 205.61% | ||
| Current Ratio | 2.42 | ||
| Quick Ratio | 2.42 | ||
| Altman-Z | 2.18 |
F-Score9
WACC8.13%
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)-10.34%
EPS 3Y-23.11%
EPS 5Y-7.16%
EPS Q2Q%600%
EPS Next Y43.42%
EPS Next 2Y31.03%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)-12.26%
Revenue growth 3Y-3.77%
Revenue growth 5Y-1.41%
Sales Q2Q%-7.29%
Revenue Next Year-2.62%
Revenue Next 2Y1.16%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y122.19%
EBIT growth 3Y-40.69%
EBIT growth 5Y-15.55%
EBIT Next Year338.83%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y1883.12%
FCF growth 3Y-24.52%
FCF growth 5Y-1.66%
OCF growth 1Y404.36%
OCF growth 3Y-22.05%
OCF growth 5Y-0.57%