WALGREENS BOOTS ALLIANCE INC (WBA) Stock Fundamental Analysis
NASDAQ:WBA - Nasdaq - US9314271084 - Common Stock - Currency: USD
Overall WBA gets a fundamental rating of 3 out of 10. We evaluated WBA against 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.
WBA had a positive operating cash flow in the past year.
In multiple years WBA reported negative net income over the last 5 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 77.50% of its industry peers.
WBA's Return On Equity of -81.27% is on the low side compared to the rest of the industry. WBA is outperformed by 87.50% of its industry peers.
With a Return On Invested Capital value of 6.64%, WBA perfoms like the industry average, outperforming 60.00% of the companies in the same industry.
WBA had an Average Return On Invested Capital over the past 3 years of 3.98%. This is below the industry average of 8.23%.
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 has a worse Gross Margin (17.39%) than 67.50% 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.
The number of shares outstanding for WBA has been reduced compared to 5 years ago.
Compared to 1 year ago, WBA has a worse debt to assets ratio.
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.
Looking at the Altman-Z score, with a value of 2.65, WBA is doing worse than 67.50% of the companies in the same industry.
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 62.50% 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 67.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.06 | ||
| Debt/FCF | 15.71 | ||
| Altman-Z | 2.65 |
ROIC/WACC0.9
WACC7.41%
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: 90.00% 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 70.00% 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 -39.56% 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.
WBA shows a small growth in Revenue. In the last year, the Revenue has grown by 6.17%.
WBA shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.22% yearly.
EPS 1Y (TTM)-39.56%
EPS 3Y-16.96%
EPS 5Y-13.65%
EPS Q2Q%-39.68%
Revenue 1Y (TTM)6.17%
Revenue growth 3Y3.67%
Revenue growth 5Y4.22%
Sales Q2Q%7.25%
3.2 Future
Based on estimates for the next years, WBA will show a decrease in Earnings Per Share. The EPS will decrease by -4.88% on average per year.
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-39.2%
EPS Next 2Y-27.15%
EPS Next 3Y-19.36%
EPS Next 5Y-4.88%
Revenue Next Year5.79%
Revenue Next 2Y3.92%
Revenue Next 3Y3.94%
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
With a Price/Earnings ratio of 6.07, the valuation of WBA can be described as very cheap.
Compared to the rest of the industry, the Price/Earnings ratio of WBA indicates a rather cheap valuation: WBA is cheaper than 95.00% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 27.35. WBA is valued rather cheaply when compared to this.
Based on the Price/Forward Earnings ratio of 7.58, the valuation of WBA can be described as very cheap.
97.50% of the companies in the same industry are more expensive than WBA, based on the Price/Forward Earnings ratio.
WBA is valuated cheaply when we compare the Price/Forward Earnings ratio to 37.54, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.07 | ||
| Fwd PE | 7.58 |
4.2 Price Multiples
92.50% of the companies in the same industry are more expensive than WBA, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of WBA indicates a somewhat cheap valuation: WBA is cheaper than 70.00% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 17.54 | ||
| EV/EBITDA | 2.84 |
4.3 Compensation for Growth
A cheap valuation may be justified as WBA's earnings are expected to decrease with -19.36% in the coming years.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-27.15%
EPS Next 3Y-19.36%
5. Dividend
5.1 Amount
WBA has a Yearly Dividend Yield of 4.35%, which is a nice return.
Compared to an average industry Dividend Yield of 2.05, WBA pays a better dividend. On top of this WBA pays more dividend than 97.50% of the companies listed 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 | 4.35% |
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
The earnings of WBA are negative and hence is the payout ratio. WBA will probably not be able to sustain this dividend level.
WBA's earnings and Dividend Rate are declining. This means the current dividend is most likely not sustainable.
DP-14.95%
EPS Next 2Y-27.15%
EPS Next 3Y-19.36%
11.59
+0.06 (+0.52%)
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-0.22%
Ins Owners0.64%
Ins Owner Change-9.83%
Market Cap10.03B
Analysts65.56
Price Target11.9 (2.67%)
Short Float %2.98%
Short Ratio2.43
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.35% |
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)0.89%
PT rev (3m)-3.1%
EPS NQ rev (1m)-0.33%
EPS NQ rev (3m)-3.2%
EPS NY rev (1m)2.05%
EPS NY rev (3m)2.32%
Revenue NQ rev (1m)-0.31%
Revenue NQ rev (3m)-0.79%
Revenue NY rev (1m)1.49%
Revenue NY rev (3m)1.54%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.07 | ||
| Fwd PE | 7.58 | ||
| P/S | 0.07 | ||
| P/FCF | 17.54 | ||
| P/OCF | 6.28 | ||
| P/B | 1.41 | ||
| P/tB | N/A | ||
| EV/EBITDA | 2.84 |
EPS(TTM)1.91
EY16.48%
EPS(NY)1.53
Fwd EY13.19%
FCF(TTM)0.66
FCFY5.7%
OCF(TTM)1.85
OCFY15.93%
SpS175.55
BVpS8.22
TBVpS-17.8
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
WACC7.41%
ROIC/WACC0.9
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)-39.56%
EPS 3Y-16.96%
EPS 5Y-13.65%
EPS Q2Q%-39.68%
EPS Next Y-39.2%
EPS Next 2Y-27.15%
EPS Next 3Y-19.36%
EPS Next 5Y-4.88%
Revenue 1Y (TTM)6.17%
Revenue growth 3Y3.67%
Revenue growth 5Y4.22%
Sales Q2Q%7.25%
Revenue Next Year5.79%
Revenue Next 2Y3.92%
Revenue Next 3Y3.94%
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%