We assign a fundamental rating of 3 out of 10 to LPL. LPL was compared to 123 industry peers in the Electronic Equipment, Instruments & Components industry. LPL may be in some trouble as it scores bad on both profitability and health. LPL has a bad growth rate and is valued cheaply.

Quickly go to:

1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year LPL was profitable.
LPL had a positive operating cash flow in the past year.
In the past 5 years LPL reported 4 times negative net income.
Of the past 5 years LPL 4 years had a positive operating cash flow.

1.2 Ratios

The Return On Assets of LPL (-1.17%) is comparable to the rest of the industry.
LPL has a Return On Equity (-4.98%) which is in line with its industry peers.
With a Return On Invested Capital value of 1.88%, LPL perfoms like the industry average, outperforming 52.85% of the companies in the same industry.

		Industry Rank	Sector Rank
ROA	-1.17%
ROE	-4.98%
ROIC	1.88%

ROA(3y)-8.02%

ROA(5y)-4.24%

ROE(3y)-36.02%

ROE(5y)-19.97%

ROIC(3y)N/A

ROIC(5y)N/A

1.3 Margins

LPL has a Operating Margin (1.63%) which is comparable to the rest of the industry.
LPL has a worse Gross Margin (12.45%) than 75.61% of its industry peers.
In the last couple of years the Gross Margin of LPL has grown nicely.

		Industry Rank	Sector Rank
OM	1.63%
PM (TTM)	N/A
GM	12.45%

OM growth 3YN/A

OM growth 5YN/A

PM growth 3YN/A

PM growth 5YN/A

GM growth 3Y-18.32%

GM growth 5Y3.99%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

LPL has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
There is no outstanding debt for LPL. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.

2.2 Solvency

Based on the Altman-Z score of 1.00, we must say that LPL is in the distress zone and has some risk of bankruptcy.
With a Altman-Z score value of 1.00, LPL is not doing good in the industry: 73.17% of the companies in the same industry are doing better.
LPL has a debt to FCF ratio of 32.18. This is a negative value and a sign of low solvency as LPL would need 32.18 years to pay back of all of its debts.
LPL has a Debt to FCF ratio (32.18) which is comparable to the rest of the industry.
LPL has a Debt/Equity ratio of 1.43. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of LPL (1.43) is worse than 91.06% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	1.43
Debt/FCF	32.18
Altman-Z	1

ROIC/WACC0.41

WACC4.64%

2.3 Liquidity

A Current Ratio of 0.70 indicates that LPL may have some problems paying its short term obligations.
LPL's Current ratio of 0.70 is on the low side compared to the rest of the industry. LPL is outperformed by 92.68% of its industry peers.
LPL has a Quick Ratio of 0.70. This is a bad value and indicates that LPL is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Quick ratio value of 0.44, LPL is not doing good in the industry: 93.50% of the companies in the same industry are doing better.

		Industry Rank	Sector Rank
Current Ratio	0.7
Quick Ratio	0.44

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WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

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3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 117.81% over the past year.

EPS 1Y (TTM)117.81%

EPS 3YN/A

EPS 5YN/A

EPS Q2Q%60.1%

Revenue 1Y (TTM)N/A

Revenue growth 3YN/A

Revenue growth 5YN/A

Sales Q2Q%-11.54%

3.2 Future

LPL is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 58.25% yearly.
The Revenue is expected to grow by 2.26% on average over the next years.

EPS Next Y52.96%

EPS Next 2Y58.25%

EPS Next 3YN/A

EPS Next 5YN/A

Revenue Next Year0.81%

Revenue Next 2Y2.26%

Revenue Next 3YN/A

Revenue Next 5YN/A

3.3 Evolution

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4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 13.69 indicates a correct valuation of LPL.
Based on the Price/Earnings ratio, LPL is valued cheaply inside the industry as 86.99% of the companies are valued more expensively.
LPL's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 28.60.
Based on the Price/Forward Earnings ratio of 9.01, the valuation of LPL can be described as reasonable.
LPL's Price/Forward Earnings ratio is rather cheap when compared to the industry. LPL is cheaper than 94.31% of the companies in the same industry.
LPL's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 25.83.

		Industry Rank	Sector Rank
PE	13.69
Fwd PE	9.01

4.2 Price Multiples

98.37% of the companies in the same industry are more expensive than LPL, based on the Enterprise Value to EBITDA ratio.
LPL's Price/Free Cash Flow ratio is rather cheap when compared to the industry. LPL is cheaper than 91.06% of the companies in the same industry.

		Industry Rank	Sector Rank
P/FCF	13.47
EV/EBITDA	3.23

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.
A more expensive valuation may be justified as LPL's earnings are expected to grow with 58.25% in the coming years.