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Sierra Wireless Inc (SW.CA) Stock Fundamental Analysis

TSX:SW - Toronto Stock Exchange - CA8265161064 - Common Stock - Currency: CAD

40.99  -0.33 (-0.8%)

Fundamental Rating

3

We assign a fundamental rating of 3 out of 10 to SW. SW was compared to 11 industry peers in the Communications Equipment industry. SW scores quite bad on profitability, while its financial health is fine. Not spectacular, but in line with the averages. SW has a correct valuation and a medium growth rate.


Dividend Valuation Growth Profitability Health

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2

1. Profitability

1.1 Basic Checks

In the past year SW was profitable.
In the past year SW has reported a negative cash flow from operations.
SW.CA Yearly Net Income VS EBIT VS OCF VS FCFSW.CA Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 0 -50M

1.2 Ratios

The profitability ratios for SW are negative, so there is not much use analyzing them.
SW has a better Return On Invested Capital (3.47%) than 61.54% of its industry peers.
Industry RankSector Rank
ROA N/A
ROE N/A
ROIC 3.47%
ROA(3y)N/A
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
SW.CA Yearly ROA, ROE, ROICSW.CA Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 0 -10 -20 -30

1.3 Margins

SW has a better Operating Margin (2.82%) than 61.54% of its industry peers.
SW has a Gross Margin of 33.03%. This is in the lower half of the industry: SW underperforms 69.23% of its industry peers.
In the last couple of years the Gross Margin of SW has remained more or less at the same level.
Industry RankSector Rank
OM 2.82%
PM (TTM) N/A
GM 33.03%
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-0.21%
GM growth 5Y-1.28%
SW.CA Yearly Profit, Operating, Gross MarginsSW.CA Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 0 10 -10 20 30

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4

2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so SW is destroying value.
The number of shares outstanding for SW has been increased compared to 1 year ago.
The debt/assets ratio for SW is higher compared to a year ago.
SW.CA Yearly Shares OutstandingSW.CA Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 10M 20M 30M
SW.CA Yearly Total Debt VS Total AssetsSW.CA Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 200M 400M 600M

2.2 Solvency

An Altman-Z score of 3.21 indicates that SW is not in any danger for bankruptcy at the moment.
With a decent Altman-Z score value of 3.21, SW is doing good in the industry, outperforming 69.23% of the companies in the same industry.
A Debt/Equity ratio of 0.19 indicates that SW is not too dependend on debt financing.
SW has a Debt to Equity ratio (0.19) which is in line with its industry peers.
Industry RankSector Rank
Debt/Equity 0.19
Debt/FCF N/A
Altman-Z 3.21
ROIC/WACC0.43
WACC8.09%
SW.CA Yearly LT Debt VS Equity VS FCFSW.CA Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 0 100M 200M 300M 400M

2.3 Liquidity

A Current Ratio of 1.76 indicates that SW should not have too much problems paying its short term obligations.
The Current ratio of SW (1.76) is comparable to the rest of the industry.
SW has a Quick Ratio of 1.28. This is a normal value and indicates that SW is financially healthy and should not expect problems in meeting its short term obligations.
SW has a Quick ratio of 1.28. This is in the better half of the industry: SW outperforms 69.23% of its industry peers.
Industry RankSector Rank
Current Ratio 1.76
Quick Ratio 1.28
SW.CA Yearly Current Assets VS Current LiabilitesSW.CA Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 100M 200M 300M

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5

3. Growth

3.1 Past

SW shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 190.38%, which is quite impressive.
Looking at the last year, SW shows a very strong growth in Revenue. The Revenue has grown by 52.51%.
The Revenue has been decreasing by -5.11% on average over the past years.
EPS 1Y (TTM)190.38%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%144.64%
Revenue 1Y (TTM)52.51%
Revenue growth 3Y-15.83%
Revenue growth 5Y-5.11%
Sales Q2Q%101.4%

3.2 Future

The Earnings Per Share is expected to grow by 41.72% on average over the next years. This is a very strong growth
Based on estimates for the next years, SW will show a quite strong growth in Revenue. The Revenue will grow by 19.94% on average per year.
EPS Next Y241.12%
EPS Next 2Y89.84%
EPS Next 3Y55.89%
EPS Next 5Y41.72%
Revenue Next Year52.17%
Revenue Next 2Y25.66%
Revenue Next 3Y23.26%
Revenue Next 5Y19.94%

3.3 Evolution

The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
SW.CA Yearly Revenue VS EstimatesSW.CA Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 200M 400M 600M 800M
SW.CA Yearly EPS VS EstimatesSW.CA Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 1 -1

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4

4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 32.79 indicates a quite expensive valuation of SW.
SW's Price/Earnings ratio is in line with the industry average.
SW is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.69, which is the current average of the S&P500 Index.
SW is valuated rather expensively with a Price/Forward Earnings ratio of 23.39.
Based on the Price/Forward Earnings ratio, SW is valued a bit cheaper than 76.92% of the companies in the same industry.
SW's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 37.36.
Industry RankSector Rank
PE 32.79
Fwd PE 23.39
SW.CA Price Earnings VS Forward Price EarningsSW.CA Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 200 400 600 800

4.2 Price Multiples

The rest of the industry has a similar Enterprise Value to EBITDA ratio as SW.
Industry RankSector Rank
P/FCF N/A
EV/EBITDA 26.95
SW.CA Per share dataSW.CA EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 5 10 15 20

4.3 Compensation for Growth

SW's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
SW's earnings are expected to grow with 55.89% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.14
PEG (5Y)N/A
EPS Next 2Y89.84%
EPS Next 3Y55.89%

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0

5. Dividend

5.1 Amount

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

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Sierra Wireless Inc

TSX:SW (1/16/2023, 7:00:00 PM)

40.99

-0.33 (-0.8%)

Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryCommunications Equipment
Earnings (Last)N/A N/A
Earnings (Next)02-22 2022-02-22
Inst Owners19.43%
Inst Owner ChangeN/A
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap1.60B
Analysts52.31
Price Target40.78 (-0.51%)
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 YearsN/A
Div Non Decr YearsN/A
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)4.76%
Min EPS beat(2)-41.64%
Max EPS beat(2)51.16%
EPS beat(4)3
Avg EPS beat(4)289.14%
Min EPS beat(4)-41.64%
Max EPS beat(4)1027.45%
EPS beat(8)N/A
Avg EPS beat(8)N/A
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)1
Avg Revenue beat(2)-4.5%
Min Revenue beat(2)-14.03%
Max Revenue beat(2)5.04%
Revenue beat(4)3
Avg Revenue beat(4)6.43%
Min Revenue beat(4)-14.03%
Max Revenue beat(4)18.5%
Revenue beat(8)N/A
Avg Revenue beat(8)N/A
Revenue beat(12)N/A
Avg Revenue beat(12)N/A
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)0%
PT rev (3m)-2.43%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-32.59%
EPS NY rev (1m)0%
EPS NY rev (3m)-19.11%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-14.36%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-6.63%
Valuation
Industry RankSector Rank
PE 32.79
Fwd PE 23.39
P/S 1.78
P/FCF N/A
P/OCF N/A
P/B 4.37
P/tB 11.5
EV/EBITDA 26.95
EPS(TTM)1.25
EY3.05%
EPS(NY)1.75
Fwd EY4.28%
FCF(TTM)-1.35
FCFYN/A
OCF(TTM)-0.8
OCFYN/A
SpS23.09
BVpS9.37
TBVpS3.57
PEG (NY)0.14
PEG (5Y)N/A
Profitability
Industry RankSector Rank
ROA N/A
ROE N/A
ROCE N/A
ROIC 3.47%
ROICexc 5.08%
ROICexgc 13.66%
OM 2.82%
PM (TTM) N/A
GM 33.03%
FCFM N/A
ROA(3y)N/A
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
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 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-0.21%
GM growth 5Y-1.28%
F-Score3
Asset Turnover1.12
Health
Industry RankSector Rank
Debt/Equity 0.19
Debt/FCF N/A
Debt/EBITDA 1.62
Cap/Depr 69.86%
Cap/Sales N/A
Interest Coverage N/A
Cash Conversion N/A
Profit Quality N/A
Current Ratio 1.76
Quick Ratio 1.28
Altman-Z 3.21
F-Score3
WACC8.09%
ROIC/WACC0.43
Cap/Depr(3y)66.21%
Cap/Depr(5y)60.87%
Cap/Sales(3y)N/A
Cap/Sales(5y)N/A
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)190.38%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%144.64%
EPS Next Y241.12%
EPS Next 2Y89.84%
EPS Next 3Y55.89%
EPS Next 5Y41.72%
Revenue 1Y (TTM)52.51%
Revenue growth 3Y-15.83%
Revenue growth 5Y-5.11%
Sales Q2Q%101.4%
Revenue Next Year52.17%
Revenue Next 2Y25.66%
Revenue Next 3Y23.26%
Revenue Next 5Y19.94%
EBIT growth 1Y125.59%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year293.41%
EBIT Next 3Y99.31%
EBIT Next 5Y102.44%
FCF growth 1Y-14.99%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-59.99%
OCF growth 3YN/A
OCF growth 5YN/A