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 40 industry peers in the Consumer Staples Distribution & Retail industry. WBA may be in some trouble as it scores bad on both profitability and health. 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.
In the past year WBA had a positive cash flow from operations.
The reported net income has been mixed in the past 5 years: WBA reported negative net income in multiple years.
Each year in the past 5 years WBA had a positive operating cash flow.
1.2 Ratios
WBA has a worse Return On Assets (-8.23%) than 80.00% of its industry peers.
WBA has a Return On Equity of -81.27%. This is amonst the worse of the industry: WBA underperforms 90.00% of its industry peers.
WBA has a Return On Invested Capital (6.64%) which is in line with its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for WBA is below the industry average of 7.97%.
The last Return On Invested Capital (6.64%) for WBA is above the 3 year average (3.98%), which is a sign of increasing profitability.
| 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
Looking at the Operating Margin, with a value of 2.41%, WBA is in line with its industry, outperforming 50.00% of the companies in the same industry.
WBA's Operating Margin has declined in the last couple of years.
WBA has a Gross Margin of 17.39%. This is in the lower half of the industry: WBA underperforms 70.00% of its industry peers.
WBA's Gross Margin has declined in the last couple of years.
| 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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so WBA is destroying value.
WBA has about the same amout of shares outstanding than it did 1 year ago.
WBA has less shares outstanding than it did 5 years ago.
WBA has a worse debt/assets ratio than last year.
2.2 Solvency
WBA has an Altman-Z score of 2.65. This is not the best score and indicates that WBA is in the grey zone with still only limited risk for bankruptcy at the moment.
The Altman-Z score of WBA (2.65) is worse than 67.50% 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.
WBA has a worse Debt to FCF ratio (15.71) than 65.00% 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.
The Debt to Equity ratio of WBA (1.06) is worse than 67.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.06 | ||
| Debt/FCF | 15.71 | ||
| Altman-Z | 2.65 |
ROIC/WACC0.91
WACC7.26%
2.3 Liquidity
A Current Ratio of 0.61 indicates that WBA may have some problems paying its short term obligations.
Looking at the Current ratio, with a value of 0.61, WBA is doing worse than 90.00% of the companies in the same industry.
A Quick Ratio of 0.32 indicates that WBA may have some problems paying its short term obligations.
WBA's Quick ratio of 0.32 is on the low side compared to the rest of the industry. WBA is outperformed by 70.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.61 | ||
| Quick Ratio | 0.32 |
3. Growth
3.1 Past
WBA shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -38.81%.
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.
WBA shows a small growth in Revenue. In the last year, the Revenue has grown by 5.08%.
Measured over the past years, WBA shows a small growth in Revenue. The Revenue has been growing by 4.22% on average per year.
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
WBA is expected to show a decrease in Earnings Per Share. In the coming years, the EPS will decrease by -4.88% yearly.
The Revenue is expected to grow by 2.54% on average over the next years.
EPS Next Y-40.58%
EPS Next 2Y-28.11%
EPS Next 3Y-14.9%
EPS Next 5Y-4.88%
Revenue Next Year4.46%
Revenue Next 2Y2.95%
Revenue Next 3Y3.69%
Revenue Next 5Y2.54%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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 5.08, which indicates a rather cheap valuation of WBA.
100.00% of the companies in the same industry are more expensive than WBA, based on the Price/Earnings ratio.
WBA is valuated cheaply when we compare the Price/Earnings ratio to 28.88, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 7.37, which indicates a rather cheap valuation of WBA.
100.00% of the companies in the same industry are more expensive than WBA, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.20, WBA is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 5.08 | ||
| Fwd PE | 7.37 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, WBA is valued cheaper than 97.50% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, WBA is valued a bit cheaper than 77.50% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.58 | ||
| EV/EBITDA | 2.75 |
4.3 Compensation for Growth
WBA's earnings are expected to decrease with -14.90% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-28.11%
EPS Next 3Y-14.9%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 6.81%, WBA is a good candidate for dividend investing.
WBA's Dividend Yield is rather good when compared to the industry average which is at 2.29. WBA pays more dividend than 100.00% of the companies in the same industry.
WBA's Dividend Yield is rather good when compared to the S&P500 average which is at 2.45.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.81% |
5.2 History
The dividend of WBA decreases each year by -3.89%.
WBA has paid a dividend for at least 10 years, which is a reliable track record.
WBA has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)-3.89%
Div Incr Years33
Div Non Decr Years33
5.3 Sustainability
The earnings of WBA are negative and hence is the payout ratio. WBA will probably not be able to sustain this dividend level.
The Dividend Rate of WBA has been decling, while earnings will also be declining. This means the current dividend is most likely not sustainable.
DP-14.95%
EPS Next 2Y-28.11%
EPS Next 3Y-14.9%
10.97
+0.04 (+0.37%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupConsumer Staples Distribution & Retail
GICS IndustryConsumer Staples Distribution & Retail
Earnings (Last)
Earnings (Next)
Inst Owners63.64%
Inst Owner Change0.58%
Ins Owners0.74%
Ins Owner Change22.48%
Market Cap9.49B
Analysts66
Price Target12.28 (11.94%)
Short Float %4.75%
Short Ratio1.68
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.81% |
Yearly Dividend1.46
Dividend Growth(5Y)-3.89%
DP-14.95%
Div Incr Years33
Div Non Decr Years33
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)6.57%
PT rev (3m)23.97%
EPS NQ rev (1m)11.51%
EPS NQ rev (3m)4.57%
EPS NY rev (1m)5.46%
EPS NY rev (3m)10.57%
Revenue NQ rev (1m)0.25%
Revenue NQ rev (3m)0.96%
Revenue NY rev (1m)0.14%
Revenue NY rev (3m)-0.06%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 5.08 | ||
| Fwd PE | 7.37 | ||
| P/S | 0.06 | ||
| P/FCF | 16.58 | ||
| P/OCF | 5.94 | ||
| P/B | 1.33 | ||
| P/tB | N/A | ||
| EV/EBITDA | 2.75 |
EPS(TTM)2.16
EY19.69%
EPS(NY)1.49
Fwd EY13.57%
FCF(TTM)0.66
FCFY6.03%
OCF(TTM)1.85
OCFY16.85%
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
WACC7.26%
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-40.58%
EPS Next 2Y-28.11%
EPS Next 3Y-14.9%
EPS Next 5Y-4.88%
Revenue 1Y (TTM)5.08%
Revenue growth 3Y3.67%
Revenue growth 5Y4.22%
Sales Q2Q%4.15%
Revenue Next Year4.46%
Revenue Next 2Y2.95%
Revenue Next 3Y3.69%
Revenue Next 5Y2.54%
EBIT growth 1Y86.05%
EBIT growth 3Y-17.02%
EBIT growth 5Y-16.16%
EBIT Next Year20.65%
EBIT Next 3Y7.61%
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%