Sierra Wireless Inc (SW.CA) Fundamental Analysis & Valuation

TSX:SW • CA8265161064

Current stock price

40.99 CAD
-0.33 (-0.8%)
Last:

This SW.CA fundamental analysis includes valuation metrics, fair value assessment, financial health analysis, profitability trends, growth metrics and dividend sustainability analysis.

2

1. SW.CA Profitability Analysis

1.1 Basic Checks

  • In the past year SW was profitable.
  • SW had a negative operating cash flow in the past year.
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 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.
  • With a decent Return On Invested Capital value of 3.47%, SW is doing good in the industry, outperforming 61.54% of the companies in the same industry.
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 2016 2017 2018 2019 2020 2021 0 -10 -20 -30

1.3 Margins

  • SW's Operating Margin of 2.82% is fine compared to the rest of the industry. SW outperforms 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 2016 2017 2018 2019 2020 2021 0 10 -10 20 30

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4

2. SW.CA Health Analysis

2.1 Basic Checks

  • SW has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
  • SW has more shares outstanding than it did 1 year ago.
  • Compared to 1 year ago, SW has a worse debt to assets ratio.
SW.CA Yearly Shares OutstandingSW.CA Yearly Shares OutstandingYearly Shares Outstanding 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 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.
  • The Altman-Z score of SW (3.21) is better than 69.23% of its industry peers.
  • A Debt/Equity ratio of 0.19 indicates that SW is not too dependend on debt financing.
  • Looking at the Debt to Equity ratio, with a value of 0.19, SW is in line with its industry, outperforming 53.85% of the companies in the same industry.
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 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.
  • SW has a Current ratio of 1.76. This is comparable to the rest of the industry: SW outperforms 53.85% of its industry peers.
  • 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.
  • The Quick ratio of SW (1.28) is better than 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 2016 2017 2018 2019 2020 2021 100M 200M 300M

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WACCDebt/EquityHow to determine the health of a companyAltman-Z scoreShow peers with great health

5

3. SW.CA Growth Analysis

3.1 Past

  • The Earnings Per Share has grown by an impressive 190.38% over the past year.
  • Looking at the last year, SW shows a very strong growth in Revenue. The Revenue has grown by 52.51%.
  • SW shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -5.11% yearly.
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 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 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 1 -1

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3

4. SW.CA Valuation Analysis

4.1 Price/Earnings Ratio

  • With a Price/Earnings ratio of 32.79, SW can be considered very expensive at the moment.
  • The rest of the industry has a similar Price/Earnings ratio as SW.
  • SW's Price/Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 26.64.
  • Based on the Price/Forward Earnings ratio of 23.39, the valuation of SW can be described as rather expensive.
  • Based on the Price/Forward Earnings ratio, SW is valued a bit cheaper than 76.92% of the companies in the same industry.
  • Compared to an average S&P500 Price/Forward Earnings ratio of 21.36, SW is valued at the same level.
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 50 100 150

4.2 Price Multiples

  • SW's Enterprise Value to EBITDA is on the same level as the industry average.
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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Price/EarningsPrice/FCFFCF per shareEV/EBITDAPEG RATIOShow best valued peers

0

5. SW.CA Dividend Analysis

5.1 Amount

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

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SW.CA Fundamentals: All Metrics, Ratios and Statistics

Sierra Wireless Inc

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

40.99

-0.33 (-0.8%)

Chartmill FA Rating
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryCommunications Equipment
Industry Strength70.87
Industry Growth49.25
Earnings (Last)N/A
Earnings (Next)02-22
Inst Owners19.43%
Inst Owner ChangeN/A
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap1.60B
Revenue(TTM)676.88M
Net Income(TTM)-21.57M
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
Graham Number0 (-100%)
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
ROICexgc growth 3YN/A
ROICexgc 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

Sierra Wireless Inc / SW.CA Fundamental Analysis FAQ

Can you provide the ChartMill fundamental rating for Sierra Wireless Inc?

ChartMill assigns a fundamental rating of 4 / 10 to SW.CA.


What is the valuation status for SW stock?

ChartMill assigns a valuation rating of 3 / 10 to Sierra Wireless Inc (SW.CA). This can be considered as Overvalued.


Can you provide the profitability details for Sierra Wireless Inc?

Sierra Wireless Inc (SW.CA) has a profitability rating of 1 / 10.


What is the financial health of Sierra Wireless Inc (SW.CA) stock?

The financial health rating of Sierra Wireless Inc (SW.CA) is 5 / 10.