Micro Focus International plc (MFGP)
US5948374039 - ADR
We assign a fundamental rating of 3 out of 10 to MFGP. MFGP was compared to 276 industry peers in the Software industry. MFGP has a bad profitability rating. Also its financial health evaluation is rather negative. MFGP is valued quite cheap, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
In the past year MFGP was profitable.
MFGP had a positive operating cash flow in the past year.
The reported net income has been mixed in the past 5 years: MFGP reported negative net income in multiple years.
MFGP had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The profitability ratios for MFGP are negative, so there is not much use analyzing them.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | N/A | ||
| ROE | N/A | ||
| ROIC | N/A |
ROA(3y)N/A
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
MFGP's Gross Margin of 73.32% is fine compared to the rest of the industry. MFGP outperforms 68.23% of its industry peers.
MFGP's Gross Margin has declined in the last couple of years.
MFGP does not have Profit Margin and Operating Margin available, so we won't be analyzing them here.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | N/A | ||
| PM (TTM) | N/A | ||
| GM | 73.32% |
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-0.3%
GM growth 5Y-3.87%
2. Health
2.1 Basic Checks
MFGP does not have a ROIC to compare to the WACC, probably because it is not profitable.
MFGP has more shares outstanding than it did 1 year ago.
MFGP has a worse debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 0.93, we must say that MFGP is in the distress zone and has some risk of bankruptcy.
MFGP's Altman-Z score of 0.93 is on the low side compared to the rest of the industry. MFGP is outperformed by 61.20% of its industry peers.
MFGP has a debt to FCF ratio of 23.67. This is a negative value and a sign of low solvency as MFGP would need 23.67 years to pay back of all of its debts.
MFGP has a Debt to FCF ratio of 23.67. This is in the better half of the industry: MFGP outperforms 61.54% of its industry peers.
MFGP has a Debt/Equity ratio of 1.57. This is a high value indicating a heavy dependency on external financing.
MFGP's Debt to Equity ratio of 1.57 is on the low side compared to the rest of the industry. MFGP is outperformed by 80.94% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.57 | ||
| Debt/FCF | 23.67 | ||
| Altman-Z | 0.93 |
ROIC/WACCN/A
WACC7.83%
2.3 Liquidity
MFGP has a Current Ratio of 0.85. This is a bad value and indicates that MFGP is not financially healthy enough and could expect problems in meeting its short term obligations.
MFGP's Current ratio of 0.85 is on the low side compared to the rest of the industry. MFGP is outperformed by 83.28% of its industry peers.
MFGP has a Quick Ratio of 0.85. This is a bad value and indicates that MFGP is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.85, MFGP is doing worse than 81.94% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.85 | ||
| Quick Ratio | 0.85 |
3. Growth
3.1 Past
The earnings per share for MFGP have decreased by -5.84% in the last year.
Measured over the past years, MFGP shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -13.83% on average per year.
MFGP shows a decrease in Revenue. In the last year, the revenue decreased by -3.37%.
Measured over the past years, MFGP shows a quite strong growth in Revenue. The Revenue has been growing by 18.42% on average per year.
EPS 1Y (TTM)-5.84%
EPS 3Y-13.83%
EPS 5YN/A
EPS growth Q2Q-13.64%
Revenue 1Y (TTM)-3.37%
Revenue growth 3Y-15.19%
Revenue growth 5Y18.42%
Revenue growth Q2Q-10.95%
3.2 Future
MFGP is expected to show a decrease in Earnings Per Share. In the coming years, the EPS will decrease by -8.54% yearly.
The Revenue is expected to decrease by -5.58% on average over the next years.
EPS Next Y-15.19%
EPS Next 2Y-13.56%
EPS Next 3Y-8.54%
EPS Next 5YN/A
Revenue Next Year-10.91%
Revenue Next 2Y-7.63%
Revenue Next 3Y-5.58%
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
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
With a Price/Earnings ratio of 4.63, the valuation of MFGP can be described as very cheap.
Based on the Price/Earnings ratio, MFGP is valued cheaply inside the industry as 96.99% of the companies are valued more expensively.
MFGP's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 24.84.
A Price/Forward Earnings ratio of 6.21 indicates a rather cheap valuation of MFGP.
Based on the Price/Forward Earnings ratio, MFGP is valued cheaper than 98.33% of the companies in the same industry.
MFGP is valuated cheaply when we compare the Price/Forward Earnings ratio to 21.35, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 4.63 | ||
| Fwd PE | 6.21 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of MFGP indicates a rather cheap valuation: MFGP is cheaper than 96.32% of the companies listed in the same industry.
95.32% of the companies in the same industry are more expensive than MFGP, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.25 | ||
| EV/EBITDA | 5.99 |
4.3 Compensation for Growth
A cheap valuation may be justified as MFGP's earnings are expected to decrease with -8.54% in the coming years.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-13.56%
EPS Next 3Y-8.54%
5. Dividend
5.1 Amount
MFGP has a Yearly Dividend Yield of 4.09%, which is a nice return.
MFGP's Dividend Yield is rather good when compared to the industry average which is at 11.45. MFGP pays more dividend than 99.00% of the companies in the same industry.
MFGP's Dividend Yield is rather good when compared to the S&P500 average which is at 2.41.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.09% |
5.2 History
MFGP has been paying a dividend for over 5 years, so it has already some track record.
The dividend of MFGP decreased recently.
Dividend Growth(5Y)N/A
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
The earnings of MFGP are negative and hence is the payout ratio. MFGP will probably not be able to sustain this dividend level.
DP-22.27%
EPS Next 2Y-13.56%
EPS Next 3Y-8.54%
Micro Focus International plc
NYSE:MFGP (1/30/2023, 7:08:28 PM)
After market: 6.29 -0.19 (-2.93%)6.48
-0.03 (-0.46%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap2.20B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.09% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
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EPS beat(8)
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EPS beat(16)
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Revenue beat(2)
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Revenue beat(8)
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Revenue beat(16)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 4.63 | ||
| Fwd PE | 6.21 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | N/A | ||
| ROE | N/A | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | N/A | ||
| PM (TTM) | N/A | ||
| GM | 73.32% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.32
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.57 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.85 | ||
| Quick Ratio | 0.85 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)-5.84%
EPS 3Y-13.83%
EPS 5Y
EPS growth Q2Q
EPS Next Y-15.19%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-3.37%
Revenue growth 3Y-15.19%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y