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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

SW gets a fundamental rating of 3 out of 10. The analysis compared the fundamentals against 12 industry peers in the Communications Equipment industry. The financial health of SW is average, but there are quite some concerns on its profitability. SW 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

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

SW has negative profitability rations, so we won't be analyzing them here.
SW's Return On Invested Capital of 3.47% is fine compared to the rest of the industry. SW outperforms 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's Operating Margin of 2.82% is fine compared to the rest of the industry. SW outperforms 61.54% of its industry peers.
The Gross Margin of SW (33.03%) is worse than 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

With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), SW is destroying value.
SW has more shares outstanding than it did 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.
SW has a Altman-Z score of 3.21. This is in the better half of the industry: SW outperforms 69.23% of its industry peers.
A Debt/Equity ratio of 0.19 indicates that SW is not too dependend on debt financing.
SW's Debt to Equity ratio of 0.19 is in line compared to the rest of the industry. SW outperforms 53.85% of 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

SW has a Current Ratio of 1.76. 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 Current ratio (1.76) which 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 better Quick ratio (1.28) 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 2015 2016 2017 2018 2019 2020 2021 100M 200M 300M

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5

3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 190.38% over the past year.
SW shows a strong growth in Revenue. In the last year, 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

SW is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 41.72% yearly.
SW is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 19.94% yearly.
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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3

4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 32.79, the valuation of SW can be described as expensive.
SW's Price/Earnings ratio is in line with the industry average.
The average S&P500 Price/Earnings ratio is at 26.35. SW is valued slightly more expensive when compared to this.
Based on the Price/Forward Earnings ratio of 23.39, the valuation of SW can be described as rather expensive.
SW's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. SW is cheaper than 76.92% of the companies in the same industry.
SW's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 22.19.
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

SW's Enterprise Value to EBITDA ratio is in line with 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

The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
A more expensive valuation may be justified as SW's earnings are expected to grow with 55.89% in the coming years.
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