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StarTek Inc (SRT) Stock Fundamental Analysis

NYSE:SRT - New York Stock Exchange, Inc. - US85569C1071 - Common Stock - Currency: USD

4.42  +0.05 (+1.14%)

After market: 4.5223 +0.1 (+2.31%)

Fundamental Rating

3

SRT gets a fundamental rating of 3 out of 10. The analysis compared the fundamentals against 82 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

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3

1. Profitability

1.1 Basic Checks

In the past year SRT was profitable.
SRT had a positive operating cash flow in the past year.
SRT had negative earnings in 4 of the past 5 years.
In the past 5 years SRT always reported a positive cash flow from operatings.
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 2015 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.
With a Return On Equity value of -12.62%, SRT perfoms like the industry average, outperforming 47.62% of the companies in the same industry.
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 21.64%.
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 2015 2016 2017 2018 2019 2020 2021 2022 0 -10 -20 -30

1.3 Margins

SRT has a Operating Margin of 1.79%. This is comparable to the rest of the industry: SRT outperforms 47.62% of its industry peers.
In the last couple of years the Operating Margin of SRT has declined.
SRT's Gross Margin of 15.62% is on the low side compared to the rest of the industry. SRT is outperformed by 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 2015 2016 2017 2018 2019 2020 2021 2022 0 5 -5 10 15

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2

2. Health

2.1 Basic Checks

SRT has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
SRT has less shares outstanding than it did 1 year ago.
The debt/assets ratio for SRT is higher compared to a year ago.
SRT Yearly Shares OutstandingSRT Yearly Shares OutstandingYearly Shares Outstanding 2015 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 2015 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.
SRT has a Altman-Z score of 1.09. This is in the lower half of the industry: SRT underperforms 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.
The Debt to Equity ratio of SRT (0.38) is comparable to the rest of the industry.
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 2015 2016 2017 2018 2019 2020 2021 2022 0 50M 100M 150M 200M

2.3 Liquidity

SRT has a Current 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.
The Current ratio of SRT (1.24) is worse than 61.90% of its industry peers.
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.
The Quick ratio of SRT (1.24) is worse than 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 2015 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.
The Revenue has been growing slightly by 5.65% on average over the past years.
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

The Earnings Per Share is expected to decrease by -5.55% on average over the next years.
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

When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
SRT Yearly Revenue VS EstimatesSRT Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 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 2014 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

Based on the Price/Earnings ratio of 6.41, the valuation of SRT can be described as very cheap.
Based on the Price/Earnings ratio, SRT is valued cheaply inside the industry as 96.43% of the companies are valued more expensively.
SRT is valuated cheaply when we compare the Price/Earnings ratio to 26.35, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 8.26 indicates a reasonable 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's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 22.19.
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 20 40 60 80 100

4.2 Price Multiples

76.19% of the companies in the same industry are more expensive than SRT, based on the Enterprise Value to EBITDA ratio.
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

A cheap valuation may be justified as SRT's earnings are expected to decrease with -5.55% in the coming years.
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

No dividends for SRT!.
Industry RankSector Rank
Dividend Yield N/A

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StarTek Inc

NYSE:SRT (1/4/2024, 8:25:49 PM)

After market: 4.5223 +0.1 (+2.31%)

4.42

+0.05 (+1.14%)

Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)11-09 2023-11-09/amc
Earnings (Next)03-25 2024-03-25/amc
Inst Owners0%
Inst Owner Change-99.99%
Ins Owners53.85%
Ins Owner Change0%
Market Cap178.35M
Analysts80
Price Target5 (13.12%)
Short Float %N/A
Short RatioN/A
Dividend
Industry RankSector Rank
Dividend Yield N/A
Yearly Dividend0
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)45.98%
Min EPS beat(2)-39.07%
Max EPS beat(2)131.02%
EPS beat(4)2
Avg EPS beat(4)59.78%
Min EPS beat(4)-39.07%
Max EPS beat(4)155.78%
EPS beat(8)4
Avg EPS beat(8)80.96%
EPS beat(12)5
Avg EPS beat(12)49.64%
EPS beat(16)6
Avg EPS beat(16)-4.09%
Revenue beat(2)1
Avg Revenue beat(2)0.45%
Min Revenue beat(2)-1.99%
Max Revenue beat(2)2.88%
Revenue beat(4)2
Avg Revenue beat(4)-20.63%
Min Revenue beat(4)-85.59%
Max Revenue beat(4)2.88%
Revenue beat(8)2
Avg Revenue beat(8)-37.56%
Revenue beat(12)5
Avg Revenue beat(12)-23.3%
Revenue beat(16)8
Avg Revenue beat(16)-16.68%
PT rev (1m)0%
PT rev (3m)3.16%
EPS NQ rev (1m)0%
EPS NQ rev (3m)2.86%
EPS NY rev (1m)0%
EPS NY rev (3m)49.33%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.27%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.17%
Valuation
Industry RankSector Rank
PE 6.41
Fwd PE 8.26
P/S 0.59
P/FCF N/A
P/OCF 20.36
P/B 1.05
P/tB N/A
EV/EBITDA 9.37
EPS(TTM)0.69
EY15.61%
EPS(NY)0.54
Fwd EY12.11%
FCF(TTM)-0.07
FCFYN/A
OCF(TTM)0.22
OCFY4.91%
SpS7.47
BVpS4.23
TBVpS-0.06
PEG (NY)N/A
PEG (5Y)N/A
Profitability
Industry RankSector Rank
ROA -5.82%
ROE -12.62%
ROCE 2.05%
ROIC 1.55%
ROICexc 1.79%
ROICexgc 6.57%
OM 1.79%
PM (TTM) N/A
GM 15.62%
FCFM N/A
ROA(3y)-2.19%
ROA(5y)-2.58%
ROE(3y)-6.77%
ROE(5y)-7.5%
ROIC(3y)3.42%
ROIC(5y)2.81%
ROICexc(3y)3.71%
ROICexc(5y)3.01%
ROICexgc(3y)9.5%
ROICexgc(5y)8.24%
ROCE(3y)4.44%
ROCE(5y)3.67%
ROICexcg growth 3Y-16.41%
ROICexcg growth 5YN/A
ROICexc growth 3Y-11.34%
ROICexc growth 5YN/A
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%
F-Score6
Asset Turnover0.82
Health
Industry RankSector Rank
Debt/Equity 0.38
Debt/FCF N/A
Debt/EBITDA 2.94
Cap/Depr 69.47%
Cap/Sales 3.89%
Interest Coverage 0.46
Cash Conversion 39.34%
Profit Quality N/A
Current Ratio 1.24
Quick Ratio 1.24
Altman-Z 1.09
F-Score6
WACC10.25%
ROIC/WACC0.15
Cap/Depr(3y)52.36%
Cap/Depr(5y)49.4%
Cap/Sales(3y)2.65%
Cap/Sales(5y)2.43%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)27.78%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%154.55%
EPS Next Y-5.73%
EPS Next 2Y-5.55%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)-1.34%
Revenue growth 3Y-16.35%
Revenue growth 5Y5.65%
Sales Q2Q%-42.61%
Revenue Next Year-43.56%
Revenue Next 2Y-22.85%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y575%
EBIT growth 3Y-22.43%
EBIT growth 5YN/A
EBIT Next Year80%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-180.43%
FCF growth 3Y5.24%
FCF growth 5Y8.98%
OCF growth 1Y-63.97%
OCF growth 3Y-2.19%
OCF growth 5Y9.86%