WALGREENS BOOTS ALLIANCE INC (WBA) Stock Fundamental Analysis
NASDAQ:WBA - Nasdaq - US9314271084 - Common Stock - Currency: USD
WBA gets a fundamental rating of 3 out of 10. The analysis compared the fundamentals against 41 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
WBA had positive earnings in the past year.
WBA had a positive operating cash flow in the past year.
The reported net income has been mixed in the past 5 years: WBA reported negative net income in multiple years.
WBA had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of -8.23%, WBA is doing worse than 78.05% of the companies in the same industry.
With a Return On Equity value of -81.27%, WBA is not doing good in the industry: 87.80% of the companies in the same industry are doing better.
The Return On Invested Capital of WBA (6.64%) is comparable to the rest of the industry.
Measured over the past 3 years, the Average Return On Invested Capital for WBA is below the industry average of 8.02%.
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 has a Operating Margin (2.41%) which is comparable to the rest of the industry.
WBA's Operating Margin has declined in the last couple of years.
WBA's Gross Margin of 17.39% is on the low side compared to the rest of the industry. WBA is outperformed by 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.
The number of shares outstanding for WBA remains at a similar level compared to 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.
WBA has a Altman-Z score of 2.65. This is in the lower half of the industry: WBA underperforms 65.85% 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 63.41% 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 68.29% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.06 | ||
| Debt/FCF | 15.71 | ||
| Altman-Z | 2.65 |
ROIC/WACC0.66
WACC10.08%
2.3 Liquidity
A Current Ratio of 0.61 indicates that WBA may have some problems paying its short term obligations.
WBA's Current ratio of 0.61 is on the low side compared to the rest of the industry. WBA is outperformed by 90.24% of its industry peers.
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 70.73% 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.
The earnings per share for WBA have been decreasing by -13.65% on average. This is quite bad
Looking at the last year, WBA shows a small growth in Revenue. The Revenue has grown by 5.08% in the last year.
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.
Based on estimates for the next years, WBA will show a small growth in Revenue. The Revenue will grow by 2.54% on average per year.
EPS Next Y-40.63%
EPS Next 2Y-28.06%
EPS Next 3Y-15.38%
EPS Next 5Y-4.88%
Revenue Next Year4.4%
Revenue Next 2Y3.13%
Revenue Next 3Y3.7%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 5.20, which indicates a rather cheap valuation of WBA.
Compared to the rest of the industry, the Price/Earnings ratio of WBA indicates a rather cheap valuation: WBA is cheaper than 100.00% of the companies listed in the same industry.
WBA is valuated cheaply when we compare the Price/Earnings ratio to 26.60, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 7.54, the valuation of WBA can be described as very cheap.
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.
WBA's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 22.43.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 5.2 | ||
| Fwd PE | 7.54 |
4.2 Price Multiples
WBA's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. WBA is cheaper than 97.56% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, WBA is valued a bit cheaper than 70.73% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.98 | ||
| EV/EBITDA | 2.8 |
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
With a Yearly Dividend Yield of 6.64%, WBA is a good candidate for dividend investing.
WBA's Dividend Yield is rather good when compared to the industry average which is at 2.30. 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 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.64% |
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.
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-28.06%
EPS Next 3Y-15.38%
11.23
-0.02 (-0.18%)
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 Change-1.4%
Ins Owners0.74%
Ins Owner Change-8.98%
Market Cap9.71B
Analysts66.32
Price Target12.28 (9.35%)
Short Float %3.67%
Short Ratio1.57
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.64% |
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)0%
PT rev (3m)3.3%
EPS NQ rev (1m)-0.71%
EPS NQ rev (3m)11.84%
EPS NY rev (1m)-0.08%
EPS NY rev (3m)5.37%
Revenue NQ rev (1m)0.13%
Revenue NQ rev (3m)0.65%
Revenue NY rev (1m)0.21%
Revenue NY rev (3m)-0.11%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 5.2 | ||
| Fwd PE | 7.54 | ||
| P/S | 0.06 | ||
| P/FCF | 16.98 | ||
| P/OCF | 6.08 | ||
| P/B | 1.37 | ||
| P/tB | N/A | ||
| EV/EBITDA | 2.8 |
EPS(TTM)2.16
EY19.23%
EPS(NY)1.49
Fwd EY13.27%
FCF(TTM)0.66
FCFY5.89%
OCF(TTM)1.85
OCFY16.46%
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
WACC10.08%
ROIC/WACC0.66
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 Year4.4%
Revenue Next 2Y3.13%
Revenue Next 3Y3.7%
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%