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SOLARWINDS CORP (SWI) Stock Fundamental Analysis

NYSE:SWI - New York Stock Exchange, Inc. - US83417Q2049 - Common Stock - Currency: USD

18.49  0 (0%)

After market: 18.4899 0 (0%)

Fundamental Rating

4

Overall SWI gets a fundamental rating of 4 out of 10. We evaluated SWI against 281 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.


Dividend Valuation Growth Profitability Health

7

1. Profitability

1.1 Basic Checks

SWI had positive earnings in the past year.
SWI had a positive operating cash flow in the past year.
The reported net income has been mixed in the past 5 years: SWI reported negative net income in multiple years.
SWI had a positive operating cash flow in each of the past 5 years.
SWI Yearly Net Income VS EBIT VS OCF VS FCFSWI Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 200M -200M -400M -600M -800M

1.2 Ratios

SWI's Return On Assets of 3.53% is fine compared to the rest of the industry. SWI outperforms 72.18% of its industry peers.
With a decent Return On Equity value of 7.99%, SWI is doing good in the industry, outperforming 72.89% of the companies in the same industry.
SWI has a Return On Invested Capital of 6.11%. This is in the better half of the industry: SWI outperforms 77.46% of its industry peers.
The Average Return On Invested Capital over the past 3 years for SWI is significantly below the industry average of 12.04%.
The 3 year average ROIC (4.19%) for SWI is below the current ROIC(6.11%), indicating increased profibility in the last year.
Industry RankSector 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
SWI Yearly ROA, ROE, ROICSWI Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 -20 -40 -60

1.3 Margins

SWI has a better Profit Margin (14.04%) than 78.52% of its industry peers.
In the last couple of years the Profit Margin of SWI has grown nicely.
SWI has a better Operating Margin (26.15%) than 92.61% of its industry peers.
In the last couple of years the Operating Margin of SWI has grown nicely.
SWI's Gross Margin of 89.55% is amongst the best of the industry. SWI outperforms 97.54% of its industry peers.
SWI's Gross Margin has improved in the last couple of years.
Industry RankSector 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%
SWI Yearly Profit, Operating, Gross MarginsSWI Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 50 -50 -100

1

2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), SWI is destroying value.
SWI has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, SWI has more shares outstanding
Compared to 1 year ago, SWI has a worse debt to assets ratio.
SWI Yearly Shares OutstandingSWI Yearly Shares OutstandingYearly Shares Outstanding 2016 2017 2018 2019 2020 2021 2022 2023 2024 50M 100M 150M
SWI Yearly Total Debt VS Total AssetsSWI Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2016 2017 2018 2019 2020 2021 2022 2023 2024 1B 2B 3B 4B 5B

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.
With a Altman-Z score value of 1.03, SWI perfoms like the industry average, outperforming 40.14% of the companies in the same industry.
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.
SWI has a Debt to FCF ratio (7.19) which is comparable to the rest of the industry.
A Debt/Equity ratio of 0.85 indicates that SWI is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.85, SWI is doing worse than 72.18% of the companies in the same industry.
Industry RankSector Rank
Debt/Equity 0.85
Debt/FCF 7.19
Altman-Z 1.03
ROIC/WACC0.54
WACC11.32%
SWI Yearly LT Debt VS Equity VS FCFSWI Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 1B 2B 3B

2.3 Liquidity

A Current Ratio of 0.85 indicates that SWI may have some problems paying its short term obligations.
The Current ratio of SWI (0.85) is worse 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 Quick ratio of 0.85. This is amonst the worse of the industry: SWI underperforms 80.63% of its industry peers.
Industry RankSector Rank
Current Ratio 0.85
Quick Ratio 0.85
SWI Yearly Current Assets VS Current LiabilitesSWI Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2016 2017 2018 2019 2020 2021 2022 2023 2024 200M 400M 600M 800M

3

3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 51.14% over the past year.
The Earnings Per Share has been decreasing by -4.79% on average over the past years.
Looking at the last year, SWI shows a small growth in Revenue. The Revenue has grown by 5.03% in the last year.
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

Based on estimates for the next years, SWI will show a decrease in Earnings Per Share. The EPS will decrease by -6.26% on average per year.
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
SWI Yearly Revenue VS EstimatesSWI Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 200M 400M 600M 800M 1B
SWI Yearly EPS VS EstimatesSWI Yearly EPS VS EstimatesYearly EPS VS Estimates 2018 2019 2020 2021 2022 2023 2024 2025 2026 0.5 1 1.5

6

4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 13.90, which indicates a correct valuation of SWI.
SWI's Price/Earnings ratio is rather cheap when compared to the industry. SWI is cheaper than 86.27% of the companies in the same industry.
When comparing the Price/Earnings ratio of SWI to the average of the S&P500 Index (27.85), we can say SWI is valued rather cheaply.
With a Price/Forward Earnings ratio of 16.78, SWI is valued correctly.
83.10% of the companies in the same industry are more expensive than SWI, based on the Price/Forward Earnings ratio.
SWI is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 20.77, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE 13.9
Fwd PE 16.78
SWI Price Earnings VS Forward Price EarningsSWI Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30 40

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, SWI is valued cheaply inside the industry as 85.56% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, SWI is valued cheaper than 82.75% of the companies in the same industry.
Industry RankSector Rank
P/FCF 18.91
EV/EBITDA 14.54
SWI Per share dataSWI EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 5 -5

4.3 Compensation for Growth

The decent profitability rating of SWI 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

0

5. Dividend

5.1 Amount

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

SOLARWINDS CORP

NYSE:SWI (4/15/2025, 8:04:00 PM)

After market: 18.4899 0 (0%)

18.49

0 (0%)

Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)02-12 2025-02-12/amc
Earnings (Next)05-01 2025-05-01/bmo
Inst Owners31.68%
Inst Owner Change-0.05%
Ins Owners1.27%
Ins Owner Change-4.25%
Market Cap3.17B
Analysts51.43
Price Target17.49 (-5.41%)
Short Float %1.32%
Short Ratio1.1
Dividend
Industry RankSector 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 RankSector 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 RankSector 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 RankSector 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%