SWITCH INC - A (SWCH)
US87105L1044 - Common Stock
SWCH gets a fundamental rating of 3 out of 10. The analysis compared the fundamentals against 86 industry peers in the IT Services industry. There are concerns on the financial health of SWCH while its profitability can be described as average. SWCH is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year SWCH was profitable.
In the past year SWCH had a positive cash flow from operations.
SWCH had positive earnings in 4 of the past 5 years.
In the past 5 years SWCH always reported a positive cash flow from operatings.
1.2 Ratios
SWCH has a better Return On Assets (11.48%) than 88.49% of its industry peers.
SWCH has a better Return On Equity (49.24%) than 97.12% of its industry peers.
SWCH has a Return On Invested Capital (2.70%) which is comparable to the rest of the industry.
The Average Return On Invested Capital over the past 3 years for SWCH is significantly below the industry average of 12.84%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.48% | ||
| ROE | 49.24% | ||
| ROIC | 2.7% |
ROA(3y)N/A
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)4.04%
ROIC(5y)N/A
1.3 Margins
Looking at the Profit Margin, with a value of 56.70%, SWCH belongs to the top of the industry, outperforming 99.28% of the companies in the same industry.
SWCH's Profit Margin has declined in the last couple of years.
With a decent Operating Margin value of 14.07%, SWCH is doing good in the industry, outperforming 74.82% of the companies in the same industry.
In the last couple of years the Operating Margin of SWCH has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 14.07% | ||
| PM (TTM) | 56.7% | ||
| GM | N/A |
OM growth 3Y9.41%
OM growth 5Y1.92%
PM growth 3Y-3.27%
PM growth 5Y-37.85%
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), SWCH is destroying value.
SWCH has more shares outstanding than it did 1 year ago.
Compared to 1 year ago, SWCH has a worse debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 1.66, we must say that SWCH is in the distress zone and has some risk of bankruptcy.
SWCH has a Altman-Z score (1.66) which is in line with its industry peers.
A Debt/Equity ratio of 2.53 is on the high side and indicates that SWCH has dependencies on debt financing.
The Debt to Equity ratio of SWCH (2.53) is worse than 91.37% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.53 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.66 |
ROIC/WACC0.28
WACC9.5%
2.3 Liquidity
SWCH has a Current Ratio of 0.37. This is a bad value and indicates that SWCH is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 0.37, SWCH is doing worse than 92.09% of the companies in the same industry.
A Quick Ratio of 0.37 indicates that SWCH may have some problems paying its short term obligations.
SWCH has a worse Quick ratio (0.37) than 92.09% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.37 | ||
| Quick Ratio | 0.37 |
3. Growth
3.1 Past
SWCH shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 100.00%, which is quite impressive.
Measured over the past years, SWCH shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -47.76% on average per year.
SWCH shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 19.74%.
The Revenue has been growing by 13.21% on average over the past years. This is quite good.
EPS 1Y (TTM)100%
EPS 3Y22.92%
EPS 5Y-47.76%
EPS growth Q2Q38.67%
Revenue 1Y (TTM)19.74%
Revenue growth 3Y13.41%
Revenue growth 5Y13.21%
Revenue growth Q2Q10.35%
3.2 Future
Based on estimates for the next years, SWCH will show a very negative growth in Earnings Per Share. The EPS will decrease by -30.59% on average per year.
SWCH is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 9.07% yearly.
EPS Next Y549.92%
EPS Next 2Y47.96%
EPS Next 3Y0.66%
EPS Next 5Y-30.59%
Revenue Next Year13.62%
Revenue Next 2Y12.42%
Revenue Next 3Y12.77%
Revenue Next 5Y9.07%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 122.32, which means the current valuation is very expensive for SWCH.
The rest of the industry has a similar Price/Earnings ratio as SWCH.
When comparing the Price/Earnings ratio of SWCH to the average of the S&P500 Index (24.84), we can say SWCH is valued expensively.
With a Price/Forward Earnings ratio of 60.18, SWCH can be considered very expensive at the moment.
SWCH's Price/Forward Earnings is on the same level as the industry average.
When comparing the Price/Forward Earnings ratio of SWCH to the average of the S&P500 Index (21.35), we can say SWCH is valued expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 122.32 | ||
| Fwd PE | 60.18 |
4.2 Price Multiples
SWCH's Enterprise Value to EBITDA is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 24.64 |
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.
The decent profitability rating of SWCH may justify a higher PE ratio.
PEG (NY)0.22
PEG (5Y)N/A
EPS Next 2Y47.96%
EPS Next 3Y0.66%
5. Dividend
5.1 Amount
With a yearly dividend of 0.61%, SWCH is not a good candidate for dividend investing.
SWCH's Dividend Yield is a higher than the industry average which is at 2.81.
With a Dividend Yield of 0.61, SWCH pays less dividend than the S&P500 average, which is at 2.41.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.61% |
5.2 History
The dividend of SWCH is nicely growing with an annual growth rate of 51.63%!
SWCH has been paying a dividend for over 5 years, so it has already some track record.
Dividend Growth(5Y)51.63%
Div Incr YearsN/A
Div Non Decr YearsN/A
5.3 Sustainability
8.33% of the earnings are spent on dividend by SWCH. This is a low number and sustainable payout ratio.
DP8.33%
EPS Next 2Y47.96%
EPS Next 3Y0.66%
SWITCH INC - A
NYSE:SWCH (12/5/2022, 7:04:00 PM)
After market: 34.26 +0.01 (+0.03%)34.25
+0.02 (+0.06%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap5.41B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.61% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 122.32 | ||
| Fwd PE | 60.18 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)0.22
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.48% | ||
| ROE | 49.24% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 14.07% | ||
| PM (TTM) | 56.7% | ||
| GM | N/A | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.2
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.53 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.37 | ||
| Quick Ratio | 0.37 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)100%
EPS 3Y22.92%
EPS 5Y
EPS growth Q2Q
EPS Next Y549.92%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)19.74%
Revenue growth 3Y13.41%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y