SRT Fundamental Analysis - StarTek Inc

Fundamental Rating

Taking everything into account, SRT scores 3 out of 10 in our fundamental rating. SRT was compared to 83 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.

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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.

In the past 5 years SRT reported 4 times negative net income.

Each year in the past 5 years SRT had a positive operating cash flow.

1.2 Ratios

With a Return On Assets value of -5.82%, SRT perfoms like the industry average, outperforming 42.86% of the companies in the same industry.

SRT's Return On Equity of -12.62% is in line compared to the rest of the industry. SRT outperforms 47.62% of its industry peers.

SRT has a Return On Invested Capital of 1.55%. This is comparable to the rest of the industry: SRT outperforms 50.00% of its industry peers.

The Average Return On Invested Capital over the past 3 years for SRT is significantly below the industry average of 22.73%.

		Industry Rank	Sector 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%

1.3 Margins

SRT has a Operating Margin (1.79%) which is comparable to the rest of the industry.

In the last couple of years the Operating Margin of SRT has declined.

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 Rank	Sector 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%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so SRT is destroying value.

The number of shares outstanding for SRT has been reduced compared to 1 year ago.

Compared to 1 year ago, SRT has a worse debt to assets ratio.

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.

Looking at the Debt to Equity ratio, with a value of 0.38, SRT is in line with its industry, outperforming 57.14% of the companies in the same industry.

		Industry Rank	Sector Rank
Debt/Equity	0.38
Debt/FCF	N/A
Altman-Z	1.09

ROIC/WACC0.15

WACC10.25%

2.3 Liquidity

A Current Ratio of 1.24 indicates that SRT should not have too much problems paying 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 Rank	Sector Rank
Current Ratio	1.24
Quick Ratio	1.24

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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 27.78% over the past year.

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.

SRT is expected to show a very negative growth in Revenue. In the coming years, the Revenue will decrease by -22.85% yearly.

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.

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4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 6.41, the valuation of SRT can be described as very cheap.

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.

SRT's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.24.

Based on the Price/Forward Earnings ratio of 8.26, the valuation of SRT can be described as reasonable.

Based on the Price/Forward Earnings ratio, SRT is valued cheaper than 94.05% of the companies in the same industry.

Compared to an average S&P500 Price/Forward Earnings ratio of 35.82, SRT is valued rather cheaply.

		Industry Rank	Sector Rank
PE	6.41
Fwd PE	8.26

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 Rank	Sector Rank
P/FCF	N/A
EV/EBITDA	9.37

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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5. Dividend

5.1 Amount

SRT does not give a dividend.

		Industry Rank	Sector 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 Rank	Sector 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 Rank	Sector 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 Rank	Sector 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 Rank	Sector 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%

StarTek Inc (SRT) Stock Fundamental Analysis

1. Profitability

1.1 Basic Checks

1.2 Ratios

1.3 Margins

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2. Health

2.1 Basic Checks

2.2 Solvency

2.3 Liquidity

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3. Growth

3.1 Past

3.2 Future

3.3 Evolution

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4. Valuation

4.1 Price/Earnings Ratio

4.2 Price Multiples

4.3 Compensation for Growth

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5. Dividend

5.1 Amount

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