SOLARWINDS CORP (SWI) Stock Fundamental Analysis
NYSE:SWI - New York Stock Exchange, Inc. - US83417Q2049 - Common Stock - Currency: USD
Taking everything into account, SWI scores 4 out of 10 in our fundamental rating. SWI was compared to 282 industry peers in the Software industry. While SWI belongs to the best of the industry regarding profitability, there are concerns on its financial health. SWI has a valuation in line with the averages, but on the other hand it scores bad on growth.
1. Profitability
1.1 Basic Checks
SWI had positive earnings in the past year.
In the past year SWI had a positive cash flow from operations.
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.
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.
With a decent Return On Invested Capital value of 6.11%, SWI is doing good in the industry, outperforming 77.46% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for SWI is significantly below the industry average of 12.17%.
The 3 year average ROIC (4.19%) for SWI is below the current ROIC(6.11%), indicating increased profibility in the last year.
| 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
SWI's Profit Margin of 14.04% is fine compared to the rest of the industry. SWI outperforms 78.52% of its industry peers.
SWI's Profit Margin has improved in the last couple of years.
SWI's Operating Margin of 26.15% is amongst the best of the industry. SWI outperforms 92.61% of its industry peers.
In the last couple of years the Operating Margin of SWI has grown nicely.
With an excellent Gross Margin value of 89.55%, SWI belongs to the best of the industry, outperforming 97.54% of the companies in the same industry.
In the last couple of years the Gross Margin of SWI has grown nicely.
| 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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), SWI 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
SWI has an Altman-Z score of 1.03. This is a bad value and indicates that SWI is not financially healthy and even 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.
SWI has a debt to FCF ratio of 7.19. This is a slightly negative value and a sign of low solvency as SWI would need 7.19 years to pay back of all of its debts.
The Debt to FCF ratio of SWI (7.19) is comparable to the rest of the industry.
SWI has a Debt/Equity ratio of 0.85. This is a neutral value indicating SWI is somewhat dependend on debt financing.
SWI has a worse Debt to Equity ratio (0.85) than 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.
The Current ratio of SWI (0.85) is worse than 80.99% of its industry peers.
A Quick Ratio of 0.85 indicates that SWI may have some problems paying its short term obligations.
The Quick ratio of SWI (0.85) is worse 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.
Measured over the past years, SWI shows a decrease in Earnings Per Share. The EPS has been decreasing by -4.79% on average per year.
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
The Earnings Per Share is expected to decrease by -6.26% on average over the next years.
SWI is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.00% yearly.
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.
4. Valuation
4.1 Price/Earnings Ratio
SWI is valuated correctly with a Price/Earnings ratio of 13.90.
86.27% of the companies in the same industry are more expensive than SWI, based on the Price/Earnings ratio.
SWI's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.46.
The Price/Forward Earnings ratio is 16.78, which indicates a correct valuation of SWI.
SWI's Price/Forward Earnings ratio is rather cheap when compared to the industry. SWI is cheaper than 83.10% of the companies 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
SWI's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. SWI is cheaper than 85.56% of the companies in the same industry.
SWI's Price/Free Cash Flow ratio is rather cheap when compared to the industry. SWI is cheaper than 82.75% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.91 | ||
| EV/EBITDA | 14.54 |
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
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%