SOLARWINDS CORP (SWI) Stock Fundamental Analysis
NYSE:SWI - New York Stock Exchange, Inc. - US83417Q2049 - Common Stock - Currency: USD
Overall SWI gets a fundamental rating of 4 out of 10. We evaluated SWI against 282 industry peers in the Software industry. While SWI has a great profitability rating, there are quite some concerns on its financial health. SWI is valued correctly, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
In the past year SWI was profitable.
SWI had a positive operating cash flow in the past year.
In multiple years SWI reported negative net income over the last 5 years.
SWI had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
SWI has a Return On Assets of 3.53%. This is in the better half of the industry: SWI outperforms 72.18% of its industry peers.
SWI has a Return On Equity of 7.99%. This is in the better half of the industry: SWI outperforms 72.89% of its industry peers.
The Return On Invested Capital of SWI (6.11%) is better than 77.46% of its industry peers.
SWI had an Average Return On Invested Capital over the past 3 years of 4.19%. This is significantly below the industry average of 12.17%.
The last Return On Invested Capital (6.11%) for SWI is above the 3 year average (4.19%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.53% | ||
| ROE | 7.99% | ||
| ROIC | 6.11% |
ROA(3y)-8.6%
ROA(5y)-4.82%
ROE(3y)-20.17%
ROE(5y)-11.5%
ROIC(3y)4.19%
ROIC(5y)N/A
1.3 Margins
Looking at the Profit Margin, with a value of 14.04%, SWI is in the better half of the industry, outperforming 78.52% of the companies in the same industry.
SWI's Profit Margin has improved in the last couple of years.
The Operating Margin of SWI (26.15%) is better than 92.61% of its industry peers.
In the last couple of years the Operating Margin of SWI has grown nicely.
SWI has a better Gross Margin (89.55%) than 97.54% of its industry peers.
SWI's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 26.15% | ||
| PM (TTM) | 14.04% | ||
| GM | 89.55% |
OM growth 3YN/A
OM growth 5Y16.98%
PM growth 3YN/A
PM growth 5Y38.56%
GM growth 3Y9.39%
GM growth 5Y4.93%
2. Health
2.1 Basic Checks
SWI has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for SWI has been increased compared to 1 year ago.
SWI has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, SWI has a worse debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 1.03, we must say that SWI is in the distress zone and has some risk of bankruptcy.
SWI's Altman-Z score of 1.03 is in line compared to the rest of the industry. SWI outperforms 40.14% of its industry peers.
The Debt to FCF ratio of SWI is 7.19, which is on the high side as it means it would take SWI, 7.19 years of fcf income to pay off all of its debts.
With a Debt to FCF ratio value of 7.19, SWI perfoms like the industry average, outperforming 53.87% of the companies in the same industry.
A Debt/Equity ratio of 0.85 indicates that SWI is somewhat dependend on debt financing.
SWI's Debt to Equity ratio of 0.85 is on the low side compared to the rest of the industry. SWI is outperformed by 72.18% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.85 | ||
| Debt/FCF | 7.19 | ||
| Altman-Z | 1.03 |
ROIC/WACC0.54
WACC11.32%
2.3 Liquidity
SWI has a Current Ratio of 0.85. This is a bad value and indicates that SWI is not financially healthy enough and could expect problems in meeting its short term obligations.
SWI has a worse Current ratio (0.85) than 80.99% of its industry peers.
SWI has a Quick Ratio of 0.85. This is a bad value and indicates that SWI is not financially healthy enough and could expect problems in meeting its short term obligations.
SWI has a worse Quick ratio (0.85) than 80.63% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.85 | ||
| Quick Ratio | 0.85 |
3. Growth
3.1 Past
SWI shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 51.14%, which is quite impressive.
SWI shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -4.79% yearly.
SWI shows a small growth in Revenue. In the last year, the Revenue has grown by 5.03%.
SWI shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 3.56% yearly.
EPS 1Y (TTM)51.14%
EPS 3Y-5.38%
EPS 5Y-4.79%
EPS Q2Q%112.5%
Revenue 1Y (TTM)5.03%
Revenue growth 3Y3.51%
Revenue growth 5Y3.56%
Sales Q2Q%6.14%
3.2 Future
The Earnings Per Share is expected to decrease by -6.26% on average over the next years.
Based on estimates for the next years, SWI will show a small growth in Revenue. The Revenue will grow by 4.00% on average per year.
EPS Next Y-17.13%
EPS Next 2Y-6.26%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year3.5%
Revenue Next 2Y4%
Revenue Next 3YN/A
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 13.90 indicates a correct valuation of SWI.
Based on the Price/Earnings ratio, SWI is valued cheaply inside the industry as 86.27% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 27.54. SWI is valued slightly cheaper when compared to this.
The Price/Forward Earnings ratio is 16.78, which indicates a correct valuation of SWI.
Compared to the rest of the industry, the Price/Forward Earnings ratio of SWI indicates a rather cheap valuation: SWI is cheaper than 83.10% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of SWI to the average of the S&P500 Index (36.44), we can say SWI is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.9 | ||
| Fwd PE | 16.78 |
4.2 Price Multiples
85.56% of the companies in the same industry are more expensive than SWI, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of SWI indicates a rather cheap valuation: SWI is cheaper than 82.75% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.91 | ||
| EV/EBITDA | 14.54 |
4.3 Compensation for Growth
SWI has a very decent profitability rating, which may justify a higher PE ratio.
SWI's earnings are expected to decrease with -6.26% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-6.26%
EPS Next 3YN/A
5. Dividend
5.1 Amount
No dividends for SWI!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
18.49
0 (0%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners31.68%
Inst Owner Change-0.11%
Ins Owners1.27%
Ins Owner Change-3.77%
Market Cap3.17B
Analysts51.43
Price Target17.49 (-5.41%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly Dividend0.99
Dividend Growth(5Y)N/A
DP150.27%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)46.74%
Min EPS beat(2)8.17%
Max EPS beat(2)85.3%
EPS beat(4)4
Avg EPS beat(4)34.6%
Min EPS beat(4)8.17%
Max EPS beat(4)85.3%
EPS beat(8)8
Avg EPS beat(8)27.79%
EPS beat(12)10
Avg EPS beat(12)18.98%
EPS beat(16)14
Avg EPS beat(16)18.3%
Revenue beat(2)2
Avg Revenue beat(2)2.33%
Min Revenue beat(2)2.07%
Max Revenue beat(2)2.6%
Revenue beat(4)4
Avg Revenue beat(4)1.59%
Min Revenue beat(4)0.29%
Max Revenue beat(4)2.6%
Revenue beat(8)8
Avg Revenue beat(8)2.03%
Revenue beat(12)10
Avg Revenue beat(12)1.35%
Revenue beat(16)12
Avg Revenue beat(16)-2.87%
PT rev (1m)0%
PT rev (3m)17.72%
EPS NQ rev (1m)0%
EPS NQ rev (3m)3.92%
EPS NY rev (1m)0%
EPS NY rev (3m)2.12%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.44%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.45%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.9 | ||
| Fwd PE | 16.78 | ||
| P/S | 3.98 | ||
| P/FCF | 18.91 | ||
| P/OCF | 16.85 | ||
| P/B | 2.27 | ||
| P/tB | N/A | ||
| EV/EBITDA | 14.54 |
EPS(TTM)1.33
EY7.19%
EPS(NY)1.1
Fwd EY5.96%
FCF(TTM)0.98
FCFY5.29%
OCF(TTM)1.1
OCFY5.93%
SpS4.64
BVpS8.16
TBVpS-6.36
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.53% | ||
| ROE | 7.99% | ||
| ROCE | 7.74% | ||
| ROIC | 6.11% | ||
| ROICexc | 6.77% | ||
| ROICexgc | N/A | ||
| OM | 26.15% | ||
| PM (TTM) | 14.04% | ||
| GM | 89.55% | ||
| FCFM | 21.06% |
ROA(3y)-8.6%
ROA(5y)-4.82%
ROE(3y)-20.17%
ROE(5y)-11.5%
ROIC(3y)4.19%
ROIC(5y)N/A
ROICexc(3y)4.61%
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)5.3%
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5Y38.26%
OM growth 3YN/A
OM growth 5Y16.98%
PM growth 3YN/A
PM growth 5Y38.56%
GM growth 3Y9.39%
GM growth 5Y4.93%
F-Score7
Asset Turnover0.25
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.85 | ||
| Debt/FCF | 7.19 | ||
| Debt/EBITDA | 4.22 | ||
| Cap/Depr | 27.54% | ||
| Cap/Sales | 2.57% | ||
| Interest Coverage | 1.99 | ||
| Cash Conversion | 66.59% | ||
| Profit Quality | 149.97% | ||
| Current Ratio | 0.85 | ||
| Quick Ratio | 0.85 | ||
| Altman-Z | 1.03 |
F-Score7
WACC11.32%
ROIC/WACC0.54
Cap/Depr(3y)23.89%
Cap/Depr(5y)17.54%
Cap/Sales(3y)2.62%
Cap/Sales(5y)2.58%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)51.14%
EPS 3Y-5.38%
EPS 5Y-4.79%
EPS Q2Q%112.5%
EPS Next Y-17.13%
EPS Next 2Y-6.26%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)5.03%
Revenue growth 3Y3.51%
Revenue growth 5Y3.56%
Sales Q2Q%6.14%
Revenue Next Year3.5%
Revenue Next 2Y4%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y38.7%
EBIT growth 3YN/A
EBIT growth 5Y21.14%
EBIT Next Year9%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y1.59%
FCF growth 3Y5.65%
FCF growth 5Y-10.12%
OCF growth 1Y2.63%
OCF growth 3Y6.43%
OCF growth 5Y-8.95%