WALGREENS BOOTS ALLIANCE INC (WBA) Stock Fundamental Analysis
NASDAQ:WBA - Nasdaq - US9314271084 - Common Stock - Currency: USD
We assign a fundamental rating of 3 out of 10 to WBA. WBA was compared to 41 industry peers in the Consumer Staples Distribution & Retail industry. Both the profitability and financial health of WBA have multiple concerns. WBA is valued quite cheap, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
In the past year WBA was profitable.
WBA had a positive operating cash flow in the past year.
In multiple years WBA reported negative net income over the last 5 years.
In the past 5 years WBA always reported a positive cash flow from operatings.
1.2 Ratios
With a Return On Assets value of -8.23%, WBA is not doing good in the industry: 75.61% of the companies in the same industry are doing better.
WBA's Return On Equity of -81.27% is on the low side compared to the rest of the industry. WBA is outperformed by 87.80% of its industry peers.
Looking at the Return On Invested Capital, with a value of 6.64%, WBA is in the better half of the industry, outperforming 60.98% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for WBA is below the industry average of 7.97%.
The 3 year average ROIC (3.98%) for WBA is below the current ROIC(6.64%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -8.23% | ||
| ROE | -81.27% | ||
| ROIC | 6.64% |
ROA(3y)-3.01%
ROA(5y)-1.08%
ROE(3y)-26.97%
ROE(5y)-13.57%
ROIC(3y)3.98%
ROIC(5y)4.68%
1.3 Margins
WBA's Operating Margin of 2.41% is in line compared to the rest of the industry. WBA outperforms 53.66% of its industry peers.
In the last couple of years the Operating Margin of WBA has declined.
WBA has a Gross Margin of 17.39%. This is in the lower half of the industry: WBA underperforms 68.29% of its industry peers.
In the last couple of years the Gross Margin of WBA has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 2.41% | ||
| PM (TTM) | N/A | ||
| GM | 17.39% |
OM growth 3Y-19.96%
OM growth 5Y-19.55%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-5.34%
GM growth 5Y-5.19%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), WBA is destroying value.
WBA has about the same amout of shares outstanding than it did 1 year ago.
The number of shares outstanding for WBA has been reduced compared to 5 years ago.
WBA has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 2.65 indicates that WBA is not a great score, but indicates only limited risk for bankruptcy at the moment.
WBA's Altman-Z score of 2.65 is on the low side compared to the rest of the industry. WBA is outperformed by 63.41% of its industry peers.
The Debt to FCF ratio of WBA is 15.71, which is on the high side as it means it would take WBA, 15.71 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of WBA (15.71) is worse than 60.98% of its industry peers.
WBA has a Debt/Equity ratio of 1.06. This is a high value indicating a heavy dependency on external financing.
WBA has a Debt to Equity ratio of 1.06. This is in the lower half of the industry: WBA underperforms 68.29% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.06 | ||
| Debt/FCF | 15.71 | ||
| Altman-Z | 2.65 |
ROIC/WACC0.91
WACC7.27%
2.3 Liquidity
A Current Ratio of 0.61 indicates that WBA may have some problems paying its short term obligations.
With a Current ratio value of 0.61, WBA is not doing good in the industry: 90.24% of the companies in the same industry are doing better.
A Quick Ratio of 0.32 indicates that WBA may have some problems paying its short term obligations.
WBA has a Quick ratio of 0.32. This is in the lower half of the industry: WBA underperforms 70.73% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.61 | ||
| Quick Ratio | 0.32 |
3. Growth
3.1 Past
The earnings per share for WBA have decreased strongly by -38.81% in the last year.
Measured over the past years, WBA shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -13.65% on average per year.
Looking at the last year, WBA shows a small growth in Revenue. The Revenue has grown by 5.08% in the last year.
The Revenue has been growing slightly by 4.22% on average over the past years.
EPS 1Y (TTM)-38.81%
EPS 3Y-16.96%
EPS 5Y-13.65%
EPS Q2Q%-47.5%
Revenue 1Y (TTM)5.08%
Revenue growth 3Y3.67%
Revenue growth 5Y4.22%
Sales Q2Q%4.15%
3.2 Future
The Earnings Per Share is expected to decrease by -4.88% on average over the next years.
WBA is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.54% yearly.
EPS Next Y-40.63%
EPS Next 2Y-28.06%
EPS Next 3Y-15.38%
EPS Next 5Y-4.88%
Revenue Next Year4.34%
Revenue Next 2Y3%
Revenue Next 3Y3.55%
Revenue Next 5Y2.54%
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 5.27, which indicates a rather cheap valuation of WBA.
95.12% of the companies in the same industry are more expensive than WBA, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 26.34, WBA is valued rather cheaply.
WBA is valuated cheaply with a Price/Forward Earnings ratio of 7.64.
WBA's Price/Forward Earnings ratio is rather cheap when compared to the industry. WBA is cheaper than 100.00% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.19, WBA is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 5.27 | ||
| Fwd PE | 7.64 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, WBA is valued cheaply inside the industry as 92.68% of the companies are valued more expensively.
65.85% of the companies in the same industry are more expensive than WBA, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 17.22 | ||
| EV/EBITDA | 2.82 |
4.3 Compensation for Growth
WBA's earnings are expected to decrease with -15.38% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-28.06%
EPS Next 3Y-15.38%
5. Dividend
5.1 Amount
WBA has a Yearly Dividend Yield of 4.39%, which is a nice return.
WBA's Dividend Yield is rather good when compared to the industry average which is at 2.17. WBA pays more dividend than 95.12% of the companies in the same industry.
WBA's Dividend Yield is rather good when compared to the S&P500 average which is at 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.39% |
5.2 History
The dividend of WBA decreases each year by -3.89%.
WBA has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)-3.89%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
WBA has negative earnings and hence a negative payout ratio. The dividend may be in danger.
WBA's earnings and Dividend Rate are declining. This means the current dividend is most likely not sustainable.
DP-14.95%
EPS Next 2Y-28.06%
EPS Next 3Y-15.38%
11.39
0 (0%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupConsumer Staples Distribution & Retail
GICS IndustryConsumer Staples Distribution & Retail
Earnings (Last)
Earnings (Next)
Inst Owners61.56%
Inst Owner Change-1.67%
Ins Owners0.64%
Ins Owner Change-9.78%
Market Cap9.85B
Analysts54.29
Price Target11.8 (3.6%)
Short Float %3.3%
Short Ratio2.15
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.39% |
Yearly Dividend1.46
Dividend Growth(5Y)-3.89%
DP-14.95%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)26.77%
Min EPS beat(2)18.59%
Max EPS beat(2)34.95%
EPS beat(4)3
Avg EPS beat(4)13.33%
Min EPS beat(4)-8.17%
Max EPS beat(4)34.95%
EPS beat(8)5
Avg EPS beat(8)11.87%
EPS beat(12)9
Avg EPS beat(12)8.8%
EPS beat(16)13
Avg EPS beat(16)10.91%
Revenue beat(2)2
Avg Revenue beat(2)2.57%
Min Revenue beat(2)0.55%
Max Revenue beat(2)4.59%
Revenue beat(4)4
Avg Revenue beat(4)2.31%
Min Revenue beat(4)0.14%
Max Revenue beat(4)4.59%
Revenue beat(8)8
Avg Revenue beat(8)2.37%
Revenue beat(12)12
Avg Revenue beat(12)1.94%
Revenue beat(16)15
Avg Revenue beat(16)1.72%
PT rev (1m)-3.96%
PT rev (3m)2.35%
EPS NQ rev (1m)-2.19%
EPS NQ rev (3m)8.29%
EPS NY rev (1m)0%
EPS NY rev (3m)5.37%
Revenue NQ rev (1m)-0.61%
Revenue NQ rev (3m)-0.02%
Revenue NY rev (1m)-0.06%
Revenue NY rev (3m)0.02%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 5.27 | ||
| Fwd PE | 7.64 | ||
| P/S | 0.06 | ||
| P/FCF | 17.22 | ||
| P/OCF | 6.16 | ||
| P/B | 1.39 | ||
| P/tB | N/A | ||
| EV/EBITDA | 2.82 |
EPS(TTM)2.16
EY18.96%
EPS(NY)1.49
Fwd EY13.08%
FCF(TTM)0.66
FCFY5.81%
OCF(TTM)1.85
OCFY16.22%
SpS175.71
BVpS8.22
TBVpS-17.82
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -8.23% | ||
| ROE | -81.27% | ||
| ROCE | 8.4% | ||
| ROIC | 6.64% | ||
| ROICexc | 6.82% | ||
| ROICexgc | 14.5% | ||
| OM | 2.41% | ||
| PM (TTM) | N/A | ||
| GM | 17.39% | ||
| FCFM | 0.38% |
ROA(3y)-3.01%
ROA(5y)-1.08%
ROE(3y)-26.97%
ROE(5y)-13.57%
ROIC(3y)3.98%
ROIC(5y)4.68%
ROICexc(3y)4.13%
ROICexc(5y)4.8%
ROICexgc(3y)9.14%
ROICexgc(5y)9.39%
ROCE(3y)5.04%
ROCE(5y)5.96%
ROICexcg growth 3Y-3.22%
ROICexcg growth 5Y-21.91%
ROICexc growth 3Y-13.35%
ROICexc growth 5Y-18.88%
OM growth 3Y-19.96%
OM growth 5Y-19.55%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-5.34%
GM growth 5Y-5.19%
F-Score4
Asset Turnover2.16
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.06 | ||
| Debt/FCF | 15.71 | ||
| Debt/EBITDA | 1.22 | ||
| Cap/Depr | 41.62% | ||
| Cap/Sales | 0.68% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 26.06% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.61 | ||
| Quick Ratio | 0.32 | ||
| Altman-Z | 2.65 |
F-Score4
WACC7.27%
ROIC/WACC0.91
Cap/Depr(3y)79.03%
Cap/Depr(5y)75.66%
Cap/Sales(3y)1.25%
Cap/Sales(5y)1.19%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-38.81%
EPS 3Y-16.96%
EPS 5Y-13.65%
EPS Q2Q%-47.5%
EPS Next Y-40.63%
EPS Next 2Y-28.06%
EPS Next 3Y-15.38%
EPS Next 5Y-4.88%
Revenue 1Y (TTM)5.08%
Revenue growth 3Y3.67%
Revenue growth 5Y4.22%
Sales Q2Q%4.15%
Revenue Next Year4.34%
Revenue Next 2Y3%
Revenue Next 3Y3.55%
Revenue Next 5Y2.54%
EBIT growth 1Y86.05%
EBIT growth 3Y-17.02%
EBIT growth 5Y-16.16%
EBIT Next Year41.71%
EBIT Next 3Y10.57%
EBIT Next 5Y27.82%
FCF growth 1Y-41.63%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-45.87%
OCF growth 3Y-43.2%
OCF growth 5Y-28.88%