MASTECH DIGITAL INC (MHH) Stock Fundamental Analysis
NYSEARCA:MHH - NYSE Arca - US57633B1008 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to MHH. MHH was compared to 82 industry peers in the Professional Services industry. MHH has a great financial health rating, but its profitability evaluates not so good. MHH is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year MHH was profitable.
MHH had a positive operating cash flow in the past year.
Of the past 5 years MHH 4 years were profitable.
In the past 5 years MHH always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 1.93%, MHH is in line with its industry, outperforming 46.34% of the companies in the same industry.
The Return On Equity of MHH (2.44%) is comparable to the rest of the industry.
MHH has a Return On Invested Capital of 1.99%. This is in the lower half of the industry: MHH underperforms 65.85% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.93% | ||
| ROE | 2.44% | ||
| ROIC | 1.99% |
ROA(3y)1.42%
ROA(5y)4.93%
ROE(3y)1.75%
ROE(5y)7.65%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
MHH's Profit Margin of 1.06% is in line compared to the rest of the industry. MHH outperforms 45.12% of its industry peers.
In the last couple of years the Profit Margin of MHH has declined.
MHH has a Operating Margin of 1.17%. This is in the lower half of the industry: MHH underperforms 65.85% of its industry peers.
MHH's Operating Margin has declined in the last couple of years.
MHH has a Gross Margin of 28.12%. This is in the lower half of the industry: MHH underperforms 64.63% of its industry peers.
MHH's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 1.17% | ||
| PM (TTM) | 1.06% | ||
| GM | 28.12% |
OM growth 3Y-34.02%
OM growth 5Y-22.17%
PM growth 3Y-32.27%
PM growth 5Y-21.56%
GM growth 3Y1.44%
GM growth 5Y2.43%
2. Health
2.1 Basic Checks
MHH 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 MHH has been increased compared to 1 year ago.
Compared to 5 years ago, MHH has more shares outstanding
There is no outstanding debt for MHH. 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
MHH has an Altman-Z score of 5.30. This indicates that MHH is financially healthy and has little risk of bankruptcy at the moment.
MHH has a better Altman-Z score (5.30) than 86.59% of its industry peers.
MHH has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | 5.3 |
ROIC/WACC0.22
WACC8.86%
2.3 Liquidity
MHH has a Current Ratio of 3.32. This indicates that MHH is financially healthy and has no problem in meeting its short term obligations.
MHH's Current ratio of 3.32 is amongst the best of the industry. MHH outperforms 87.80% of its industry peers.
MHH has a Quick Ratio of 3.32. This indicates that MHH is financially healthy and has no problem in meeting its short term obligations.
The Quick ratio of MHH (3.32) is better than 89.02% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.32 | ||
| Quick Ratio | 3.32 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 82.05% over the past year.
Measured over the past years, MHH shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -22.18% on average per year.
Looking at the last year, MHH shows a small growth in Revenue. The Revenue has grown by 3.93% in the last year.
MHH shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 0.55% yearly.
EPS 1Y (TTM)82.05%
EPS 3Y-16.05%
EPS 5Y-22.18%
EPS Q2Q%0%
Revenue 1Y (TTM)3.93%
Revenue growth 3Y-3.59%
Revenue growth 5Y0.55%
Sales Q2Q%3.19%
3.2 Future
Based on estimates for the next years, MHH will show a quite strong growth in Earnings Per Share. The EPS will grow by 18.67% on average per year.
MHH is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 1.51% yearly.
EPS Next Y-0.42%
EPS Next 2Y18.67%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year-2.09%
Revenue Next 2Y1.51%
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
With a Price/Earnings ratio of 10.51, the valuation of MHH can be described as very reasonable.
Compared to the rest of the industry, the Price/Earnings ratio of MHH indicates a rather cheap valuation: MHH is cheaper than 86.59% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of MHH to the average of the S&P500 Index (26.54), we can say MHH is valued rather cheaply.
MHH is valuated cheaply with a Price/Forward Earnings ratio of 7.46.
Based on the Price/Forward Earnings ratio, MHH is valued cheaply inside the industry as 91.46% of the companies are valued more expensively.
MHH is valuated cheaply when we compare the Price/Forward Earnings ratio to 35.28, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.51 | ||
| Fwd PE | 7.46 |
4.2 Price Multiples
70.73% of the companies in the same industry are more expensive than MHH, based on the Enterprise Value to EBITDA ratio.
67.07% of the companies in the same industry are more expensive than MHH, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.48 | ||
| EV/EBITDA | 10.56 |
4.3 Compensation for Growth
MHH's earnings are expected to grow with 18.67% in the coming years. This may justify a more expensive valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y18.67%
EPS Next 3YN/A
5. Dividend
5.1 Amount
MHH does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
7.46
+0.18 (+2.41%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)
Earnings (Next)
Inst Owners18.8%
Inst Owner Change3.43%
Ins Owners68.35%
Ins Owner Change0%
Market Cap87.73M
Analysts0
Price Target13.97 (87.27%)
Short Float %0.74%
Short Ratio1.44
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DP0%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-7.04%
Min EPS beat(2)-40.59%
Max EPS beat(2)26.51%
EPS beat(4)3
Avg EPS beat(4)54.73%
Min EPS beat(4)-40.59%
Max EPS beat(4)150.82%
EPS beat(8)4
Avg EPS beat(8)19.12%
EPS beat(12)4
Avg EPS beat(12)4.09%
EPS beat(16)6
Avg EPS beat(16)3.01%
Revenue beat(2)1
Avg Revenue beat(2)-1.54%
Min Revenue beat(2)-3.3%
Max Revenue beat(2)0.23%
Revenue beat(4)3
Avg Revenue beat(4)0.71%
Min Revenue beat(4)-3.3%
Max Revenue beat(4)3.93%
Revenue beat(8)3
Avg Revenue beat(8)-1.17%
Revenue beat(12)4
Avg Revenue beat(12)-1.83%
Revenue beat(16)6
Avg Revenue beat(16)-1.41%
PT rev (1m)0%
PT rev (3m)-5.52%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-31.43%
EPS NY rev (1m)0%
EPS NY rev (3m)0%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-3.52%
Revenue NY rev (1m)-1.71%
Revenue NY rev (3m)-1.71%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.51 | ||
| Fwd PE | 7.46 | ||
| P/S | 0.44 | ||
| P/FCF | 18.48 | ||
| P/OCF | 15.88 | ||
| P/B | 1.01 | ||
| P/tB | 1.75 | ||
| EV/EBITDA | 10.56 |
EPS(TTM)0.71
EY9.52%
EPS(NY)1
Fwd EY13.4%
FCF(TTM)0.4
FCFY5.41%
OCF(TTM)0.47
OCFY6.3%
SpS17.04
BVpS7.39
TBVpS4.26
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.93% | ||
| ROE | 2.44% | ||
| ROCE | 2.59% | ||
| ROIC | 1.99% | ||
| ROICexc | 2.73% | ||
| ROICexgc | 6.19% | ||
| OM | 1.17% | ||
| PM (TTM) | 1.06% | ||
| GM | 28.12% | ||
| FCFM | 2.37% |
ROA(3y)1.42%
ROA(5y)4.93%
ROE(3y)1.75%
ROE(5y)7.65%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3Y-33.48%
ROICexcg growth 5Y-23.87%
ROICexc growth 3Y-31%
ROICexc growth 5Y-20.46%
OM growth 3Y-34.02%
OM growth 5Y-22.17%
PM growth 3Y-32.27%
PM growth 5Y-21.56%
GM growth 3Y1.44%
GM growth 5Y2.43%
F-Score8
Asset Turnover1.82
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 22.63% | ||
| Cap/Sales | 0.39% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 95.6% | ||
| Profit Quality | 223.45% | ||
| Current Ratio | 3.32 | ||
| Quick Ratio | 3.32 | ||
| Altman-Z | 5.3 |
F-Score8
WACC8.86%
ROIC/WACC0.22
Cap/Depr(3y)18.5%
Cap/Depr(5y)22.28%
Cap/Sales(3y)0.33%
Cap/Sales(5y)0.4%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)82.05%
EPS 3Y-16.05%
EPS 5Y-22.18%
EPS Q2Q%0%
EPS Next Y-0.42%
EPS Next 2Y18.67%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)3.93%
Revenue growth 3Y-3.59%
Revenue growth 5Y0.55%
Sales Q2Q%3.19%
Revenue Next Year-2.09%
Revenue Next 2Y1.51%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y229.29%
EBIT growth 3Y-36.39%
EBIT growth 5Y-21.75%
EBIT Next YearN/A
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-66.05%
FCF growth 3Y23.47%
FCF growth 5Y-16.14%
OCF growth 1Y-61.06%
OCF growth 3Y11.3%
OCF growth 5Y-14.87%