WALGREENS BOOTS ALLIANCE INC (WBA) Stock Fundamental Analysis
NASDAQ:WBA - Nasdaq - US9314271084 - Common Stock - Currency: USD
Taking everything into account, WBA scores 3 out of 10 in our fundamental rating. WBA was compared to 40 industry peers in the Consumer Staples Distribution & Retail industry. Both the profitability and financial health of WBA have multiple concerns. WBA is cheap, but on the other hand it scores bad on growth.
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 has a Return On Equity of -81.27%. This is amonst the worse of the industry: WBA underperforms 87.50% of its industry peers.
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 8.23%.
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
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.
Looking at the Gross Margin, with a value of 17.39%, WBA is doing worse than 67.50% of the companies in the same industry.
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
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.
WBA has less shares outstanding than it did 5 years ago.
The debt/assets ratio for WBA is higher compared to a year ago.
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 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.
Looking at the Debt to FCF ratio, with a value of 15.71, WBA is doing worse than 62.50% of the companies in the same industry.
WBA has a Debt/Equity ratio of 1.06. This is a high value indicating a heavy dependency on external financing.
WBA's Debt to Equity ratio of 1.06 is on the low side compared to the rest of the industry. WBA is outperformed by 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
WACC7.38%
2.3 Liquidity
WBA has a Current Ratio of 0.61. This is a bad value and indicates that WBA is not financially healthy enough and could expect problems in meeting 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 worse Quick ratio (0.32) than 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 -39.56%.
WBA shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -13.65% yearly.
Looking at the last year, WBA shows a small growth in Revenue. The Revenue has grown by 6.17% in the last year.
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
WBA is valuated cheaply with a Price/Earnings ratio of 6.07.
Based on the Price/Earnings ratio, WBA is valued cheaper than 95.00% of the companies in the same industry.
WBA's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.69.
With a Price/Forward Earnings ratio of 7.58, 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 97.50% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of WBA to the average of the S&P500 Index (37.36), we can say WBA is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.07 | ||
| Fwd PE | 7.58 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, WBA is valued cheaper than 92.50% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, WBA is valued a bit cheaper than the industry average as 70.00% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 17.54 | ||
| EV/EBITDA | 2.84 |
4.3 Compensation for Growth
WBA's earnings are expected to decrease with -19.36% in the coming years. This may justify a cheaper valuation.
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 2.34.
| 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
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-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
WACC7.38%
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%