StarTek Inc (SRT) Stock Fundamental Analysis

USA • New York Stock Exchange • NYSE:SRT • US85569C1071

4.42 USD
+0.05 (+1.14%)
At close: Jan 4, 2024
4.5223 USD
+0.1 (+2.31%)
After Hours: 1/4/2024, 8:25:49 PM
Fundamental Rating

2

Overall SRT gets a fundamental rating of 2 out of 10. We evaluated SRT against 88 industry peers in the IT Services industry. Both the profitability and financial health of SRT have multiple concerns. SRT is valued correctly, but it does not seem to be growing.


Dividend Valuation Growth Profitability Health

2

1. Profitability

1.1 Basic Checks

  • In the past year SRT was profitable.
  • In the past year SRT had a positive cash flow from operations.
SRT Yearly Net Income VS EBIT VS OCF VS FCFSRT Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2016 2017 2018 2019 2020 2021 2022 0 20M -20M 40M 60M

1.2 Ratios

  • The Return On Assets of SRT (-5.82%) is comparable to the rest of the industry.
  • SRT has a Return On Equity of -12.62%. This is comparable to the rest of the industry: SRT outperforms 47.62% of its industry peers.
  • SRT has a Return On Invested Capital (1.55%) which is comparable to the rest of the industry.
  • SRT had an Average Return On Invested Capital over the past 3 years of 3.42%. This is significantly below the industry average of 29.07%.
Industry RankSector Rank
ROA -5.82%
ROE -12.62%
ROIC 1.55%
ROA(3y)-2.19%
ROA(5y)-2.58%
ROE(3y)-6.77%
ROE(5y)-7.5%
ROIC(3y)3.42%
ROIC(5y)2.81%
SRT Yearly ROA, ROE, ROICSRT Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2016 2017 2018 2019 2020 2021 2022 0 -5 -10 -15

1.3 Margins

  • SRT has a Operating Margin (1.79%) which is in line with its industry peers.
  • SRT's Operating Margin has declined in the last couple of years.
  • SRT has a Gross Margin of 15.62%. This is amonst the worse of the industry: SRT underperforms 91.67% of its industry peers.
  • SRT's Gross Margin has improved in the last couple of years.
Industry RankSector Rank
OM 1.79%
PM (TTM) N/A
GM 15.62%
OM growth 3Y-7.27%
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-3.8%
GM growth 5Y6.27%
SRT Yearly Profit, Operating, Gross MarginsSRT Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2016 2017 2018 2019 2020 2021 2022 0 5 -5 10 15

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2

2. Health

2.1 Basic Checks

  • The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so SRT is destroying value.
  • SRT has less shares outstanding than it did 1 year ago.
  • Compared to 1 year ago, SRT has a worse debt to assets ratio.
SRT Yearly Shares OutstandingSRT Yearly Shares OutstandingYearly Shares Outstanding 2016 2017 2018 2019 2020 2021 2022 10M 20M 30M 40M
SRT Yearly Total Debt VS Total AssetsSRT Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2016 2017 2018 2019 2020 2021 2022 200M 400M 600M

2.2 Solvency

  • Based on the Altman-Z score of 1.09, we must say that SRT is in the distress zone and has some risk of bankruptcy.
  • The Altman-Z score of SRT (1.09) is worse than 66.67% of its industry peers.
  • SRT has a Debt/Equity ratio of 0.38. This is a healthy value indicating a solid balance between debt and equity.
  • SRT has a Debt to Equity ratio (0.38) which is in line with its industry peers.
Industry RankSector Rank
Debt/Equity 0.38
Debt/FCF N/A
Altman-Z 1.09
ROIC/WACC0.15
WACC10.25%
SRT Yearly LT Debt VS Equity VS FCFSRT Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2016 2017 2018 2019 2020 2021 2022 0 50M 100M 150M 200M

2.3 Liquidity

  • A Current Ratio of 1.24 indicates that SRT should not have too much problems paying its short term obligations.
  • Looking at the Current ratio, with a value of 1.24, SRT is doing worse than 61.90% of the companies in the same industry.
  • SRT has a Quick Ratio of 1.24. This is a normal value and indicates that SRT is financially healthy and should not expect problems in meeting its short term obligations.
  • SRT has a Quick ratio of 1.24. This is in the lower half of the industry: SRT underperforms 61.90% of its industry peers.
Industry RankSector Rank
Current Ratio 1.24
Quick Ratio 1.24
SRT Yearly Current Assets VS Current LiabilitesSRT Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2016 2017 2018 2019 2020 2021 2022 100M 200M 300M

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2

3. Growth

3.1 Past

  • SRT shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 27.78%, which is quite impressive.
  • The Revenue has decreased by -1.34% in the past year.
  • Measured over the past years, SRT shows a small growth in Revenue. The Revenue has been growing by 5.65% on average per year.
EPS 1Y (TTM)27.78%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%154.55%
Revenue 1Y (TTM)-1.34%
Revenue growth 3Y-16.35%
Revenue growth 5Y5.65%
Sales Q2Q%-42.61%

3.2 Future

  • Based on estimates for the next years, SRT will show a decrease in Earnings Per Share. The EPS will decrease by -5.55% on average per year.
  • Based on estimates for the next years, SRT will show a very negative growth in Revenue. The Revenue will decrease by -22.85% on average per year.
EPS Next Y-5.73%
EPS Next 2Y-5.55%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year-43.56%
Revenue Next 2Y-22.85%
Revenue Next 3YN/A
Revenue Next 5YN/A

3.3 Evolution

  • The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
SRT Yearly Revenue VS EstimatesSRT Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 200M 400M 600M
SRT Yearly EPS VS EstimatesSRT Yearly EPS VS EstimatesYearly EPS VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 0.5 -0.5 -1

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5

4. Valuation

4.1 Price/Earnings Ratio

  • A Price/Earnings ratio of 6.41 indicates a rather cheap valuation of SRT.
  • Compared to the rest of the industry, the Price/Earnings ratio of SRT indicates a rather cheap valuation: SRT is cheaper than 96.43% of the companies listed in the same industry.
  • Compared to an average S&P500 Price/Earnings ratio of 28.32, SRT is valued rather cheaply.
  • The Price/Forward Earnings ratio is 8.26, which indicates a very decent valuation of SRT.
  • Compared to the rest of the industry, the Price/Forward Earnings ratio of SRT indicates a rather cheap valuation: SRT is cheaper than 94.05% of the companies listed in the same industry.
  • SRT is valuated cheaply when we compare the Price/Forward Earnings ratio to 25.57, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE 6.41
Fwd PE 8.26
SRT Price Earnings VS Forward Price EarningsSRT Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30

4.2 Price Multiples

  • Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of SRT indicates a somewhat cheap valuation: SRT is cheaper than 76.19% of the companies listed in the same industry.
Industry RankSector Rank
P/FCF N/A
EV/EBITDA 9.37
SRT Per share dataSRT EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 2 4 6

4.3 Compensation for Growth

  • SRT's earnings are expected to decrease with -5.55% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-5.55%
EPS Next 3YN/A

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0

5. Dividend

5.1 Amount

  • SRT does not give a dividend.
Industry RankSector Rank
Dividend Yield N/A

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StarTek Inc / SRT FAQ

What is the ChartMill fundamental rating of StarTek Inc (SRT) stock?

ChartMill assigns a fundamental rating of 3 / 10 to SRT.


What is the valuation status of StarTek Inc (SRT) stock?

ChartMill assigns a valuation rating of 5 / 10 to StarTek Inc (SRT). This can be considered as Fairly Valued.


How profitable is StarTek Inc (SRT) stock?

StarTek Inc (SRT) has a profitability rating of 3 / 10.


Can you provide the PE and PB ratios for SRT stock?

The Price/Earnings (PE) ratio for StarTek Inc (SRT) is 6.41 and the Price/Book (PB) ratio is 1.05.


What is the expected EPS growth for StarTek Inc (SRT) stock?

The Earnings per Share (EPS) of StarTek Inc (SRT) is expected to decline by -5.73% in the next year.