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STERLING CHECK CORP (STER) Stock Fundamental Analysis

NASDAQ:STER - Nasdaq - US85917T1097 - Common Stock - Currency: USD

16.74  -0.04 (-0.24%)

Fundamental Rating

3

We assign a fundamental rating of 3 out of 10 to STER. STER was compared to 81 industry peers in the Professional Services industry. STER may be in some trouble as it scores bad on both profitability and health. STER is quite expensive at the moment. It does show a decent growth rate.


Dividend Valuation Growth Profitability Health

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2

1. Profitability

1.1 Basic Checks

STER had positive earnings in the past year.
In the past year STER had a positive cash flow from operations.
STER had negative earnings in 4 of the past 5 years.
STER had a positive operating cash flow in each of the past 5 years.
STER Yearly Net Income VS EBIT VS OCF VS FCFSTER Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2019 2020 2021 2022 2023 0 50M -50M 100M

1.2 Ratios

Looking at the Return On Assets, with a value of -1.04%, STER is doing worse than 71.79% of the companies in the same industry.
With a Return On Equity value of -2.07%, STER is not doing good in the industry: 70.51% of the companies in the same industry are doing better.
The Return On Invested Capital of STER (2.06%) is worse than 65.38% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for STER is significantly below the industry average of 12.53%.
Industry RankSector Rank
ROA -1.04%
ROE -2.07%
ROIC 2.06%
ROA(3y)0.01%
ROA(5y)-1.46%
ROE(3y)0%
ROE(5y)-3.28%
ROIC(3y)2.58%
ROIC(5y)N/A
STER Yearly ROA, ROE, ROICSTER Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2019 2020 2021 2022 2023 0 2 -2 -4 -6 -8

1.3 Margins

STER has a Operating Margin (4.56%) which is in line with its industry peers.
With a Gross Margin value of 45.32%, STER perfoms like the industry average, outperforming 52.56% of the companies in the same industry.
In the last couple of years the Gross Margin of STER has declined.
Industry RankSector Rank
OM 4.56%
PM (TTM) N/A
GM 45.32%
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-3.7%
GM growth 5YN/A
STER Yearly Profit, Operating, Gross MarginsSTER Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2019 2020 2021 2022 2023 0 20 40

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3

2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so STER is destroying value.
STER has less shares outstanding than it did 1 year ago.
STER has a worse debt/assets ratio than last year.
STER Yearly Shares OutstandingSTER Yearly Shares OutstandingYearly Shares Outstanding 2019 2020 2021 2022 2023 20M 40M 60M 80M
STER Yearly Total Debt VS Total AssetsSTER Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2019 2020 2021 2022 2023 500M 1B

2.2 Solvency

An Altman-Z score of 1.82 indicates that STER is not a great score, but indicates only limited risk for bankruptcy at the moment.
STER has a worse Altman-Z score (1.82) than 69.23% of its industry peers.
The Debt to FCF ratio of STER is 8.97, which is on the high side as it means it would take STER, 8.97 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 8.97, STER is doing worse than 60.26% of the companies in the same industry.
STER has a Debt/Equity ratio of 0.73. This is a neutral value indicating STER is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.73, STER is not doing good in the industry: 62.82% of the companies in the same industry are doing better.
Industry RankSector Rank
Debt/Equity 0.73
Debt/FCF 8.97
Altman-Z 1.82
ROIC/WACC0.24
WACC8.51%
STER Yearly LT Debt VS Equity VS FCFSTER Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2019 2020 2021 2022 2023 200M 400M 600M

2.3 Liquidity

A Current Ratio of 1.62 indicates that STER should not have too much problems paying its short term obligations.
The Current ratio of STER (1.62) is better than 61.54% of its industry peers.
A Quick Ratio of 1.62 indicates that STER should not have too much problems paying its short term obligations.
With a decent Quick ratio value of 1.62, STER is doing good in the industry, outperforming 64.10% of the companies in the same industry.
Industry RankSector Rank
Current Ratio 1.62
Quick Ratio 1.62
STER Yearly Current Assets VS Current LiabilitesSTER Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2019 2020 2021 2022 2023 50M 100M 150M 200M 250M

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4

3. Growth

3.1 Past

The earnings per share for STER have decreased strongly by -12.75% in the last year.
The Revenue has decreased by -0.32% in the past year.
STER shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 16.59% yearly.
EPS 1Y (TTM)-12.75%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%-17.86%
Revenue 1Y (TTM)-0.32%
Revenue growth 3Y16.59%
Revenue growth 5YN/A
Sales Q2Q%5.33%

3.2 Future

STER is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 9.09% yearly.
STER is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.13% yearly.
EPS Next Y-8.3%
EPS Next 2Y5.97%
EPS Next 3Y9.09%
EPS Next 5YN/A
Revenue Next Year6.36%
Revenue Next 2Y7.66%
Revenue Next 3Y8.13%
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.
STER Yearly Revenue VS EstimatesSTER Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2019 2020 2021 2022 2023 2024 2025 2026 200M 400M 600M 800M
STER Yearly EPS VS EstimatesSTER Yearly EPS VS EstimatesYearly EPS VS Estimates 2021 2022 2023 2024 2025 2026 0.2 0.4 0.6 0.8 1

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3

4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 18.81, which indicates a rather expensive current valuation of STER.
Based on the Price/Earnings ratio, STER is valued a bit cheaper than 66.67% of the companies in the same industry.
STER's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.45.
STER is valuated correctly with a Price/Forward Earnings ratio of 15.06.
Based on the Price/Forward Earnings ratio, STER is valued a bit cheaper than the industry average as 73.08% of the companies are valued more expensively.
STER is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 21.90, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE 18.81
Fwd PE 15.06
STER Price Earnings VS Forward Price EarningsSTER Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 5 10 15 20 25

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of STER is on the same level as its industry peers.
STER's Price/Free Cash Flow is on the same level as the industry average.
Industry RankSector Rank
P/FCF 26.62
EV/EBITDA 21.88
STER Per share dataSTER EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 2 -2 4 -4 6

4.3 Compensation for Growth

PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y5.97%
EPS Next 3Y9.09%

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0

5. Dividend

5.1 Amount

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

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STERLING CHECK CORP

NASDAQ:STER (10/30/2024, 8:00:00 PM)

16.74

-0.04 (-0.24%)

Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)11-08 2024-11-08/amc
Earnings (Next)N/A N/A
Inst Owners84.64%
Inst Owner Change-99.97%
Ins Owners0.47%
Ins Owner Change0%
Market Cap1.64B
Analysts52.31
Price Target16.83 (0.54%)
Short Float %N/A
Short RatioN/A
Dividend
Industry RankSector Rank
Dividend Yield N/A
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-22.66%
Min EPS beat(2)-29.87%
Max EPS beat(2)-15.44%
EPS beat(4)0
Avg EPS beat(4)-18.8%
Min EPS beat(4)-29.87%
Max EPS beat(4)-13.71%
EPS beat(8)2
Avg EPS beat(8)-11.35%
EPS beat(12)6
Avg EPS beat(12)0.84%
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)1
Avg Revenue beat(2)-0.46%
Min Revenue beat(2)-1.66%
Max Revenue beat(2)0.74%
Revenue beat(4)1
Avg Revenue beat(4)-3.29%
Min Revenue beat(4)-8.28%
Max Revenue beat(4)0.74%
Revenue beat(8)1
Avg Revenue beat(8)-2.85%
Revenue beat(12)5
Avg Revenue beat(12)1.14%
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)2.01%
PT rev (3m)2.01%
EPS NQ rev (1m)-11.11%
EPS NQ rev (3m)-18.42%
EPS NY rev (1m)-4.93%
EPS NY rev (3m)-11.63%
Revenue NQ rev (1m)-0.38%
Revenue NQ rev (3m)-1.31%
Revenue NY rev (1m)0.89%
Revenue NY rev (3m)-0.1%
Valuation
Industry RankSector Rank
PE 18.81
Fwd PE 15.06
P/S 2.23
P/FCF 26.62
P/OCF 19.5
P/B 2.23
P/tB N/A
EV/EBITDA 21.88
EPS(TTM)0.89
EY5.32%
EPS(NY)1.11
Fwd EY6.64%
FCF(TTM)0.63
FCFY3.76%
OCF(TTM)0.86
OCFY5.13%
SpS7.52
BVpS7.49
TBVpS-4.32
PEG (NY)N/A
PEG (5Y)N/A
Profitability
Industry RankSector Rank
ROA -1.04%
ROE -2.07%
ROCE 2.6%
ROIC 2.06%
ROICexc 2.18%
ROICexgc 44.9%
OM 4.56%
PM (TTM) N/A
GM 45.32%
FCFM 8.37%
ROA(3y)0.01%
ROA(5y)-1.46%
ROE(3y)0%
ROE(5y)-3.28%
ROIC(3y)2.58%
ROIC(5y)N/A
ROICexc(3y)2.75%
ROICexc(5y)N/A
ROICexgc(3y)51.21%
ROICexgc(5y)N/A
ROCE(3y)3.27%
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-3.7%
GM growth 5YN/A
F-Score3
Asset Turnover0.5
Health
Industry RankSector Rank
Debt/Equity 0.73
Debt/FCF 8.97
Debt/EBITDA 5.55
Cap/Depr 35.59%
Cap/Sales 3.06%
Interest Coverage 0.91
Cash Conversion 86.87%
Profit Quality N/A
Current Ratio 1.62
Quick Ratio 1.62
Altman-Z 1.82
F-Score3
WACC8.51%
ROIC/WACC0.24
Cap/Depr(3y)27.76%
Cap/Depr(5y)27.08%
Cap/Sales(3y)2.81%
Cap/Sales(5y)3.7%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-12.75%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%-17.86%
EPS Next Y-8.3%
EPS Next 2Y5.97%
EPS Next 3Y9.09%
EPS Next 5YN/A
Revenue 1Y (TTM)-0.32%
Revenue growth 3Y16.59%
Revenue growth 5YN/A
Sales Q2Q%5.33%
Revenue Next Year6.36%
Revenue Next 2Y7.66%
Revenue Next 3Y8.13%
Revenue Next 5YN/A
EBIT growth 1Y-27.27%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year23.82%
EBIT Next 3Y15.9%
EBIT Next 5YN/A
FCF growth 1Y71.64%
FCF growth 3Y57.18%
FCF growth 5YN/A
OCF growth 1Y48.64%
OCF growth 3Y38.83%
OCF growth 5YN/A