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 40 industry peers in the Consumer Staples Distribution & Retail industry. WBA has a bad profitability rating. Also its financial health evaluation is rather negative. 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.
In the past 5 years WBA always reported a positive cash flow from operatings.
1.2 Ratios
WBA has a Return On Assets of -8.23%. This is in the lower half of the industry: WBA underperforms 77.50% of its industry peers.
The Return On Equity of WBA (-81.27%) is worse than 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.
Measured over the past 3 years, the Average Return On Invested Capital for WBA 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's Operating Margin of 2.41% is in line compared to the rest of the industry. WBA outperforms 55.00% of its industry peers.
In the last couple of years the Operating Margin of WBA has declined.
WBA's Gross Margin of 17.39% is on the low side compared to the rest of the industry. WBA is outperformed by 67.50% 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
WBA has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
WBA has about the same amout of shares outstanding than it did 1 year ago.
Compared to 5 years ago, WBA has less shares outstanding
Compared to 1 year ago, WBA has a worse debt to assets ratio.
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 has a worse Altman-Z score (2.65) than 67.50% of its industry peers.
WBA has a debt to FCF ratio of 15.71. This is a negative value and a sign of low solvency as WBA would need 15.71 years to pay back of all of its debts.
The Debt to FCF ratio of WBA (15.71) is worse than 62.50% of its industry peers.
A Debt/Equity ratio of 1.06 is on the high side and indicates that WBA has dependencies on debt 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/WACC0.9
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.
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.
WBA has a Quick 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 Quick ratio value of 0.32, WBA is not doing good in the industry: 70.00% of the companies in the same industry are doing better.
| 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.
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.
The Revenue has been growing slightly by 4.22% on average over the past years.
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.
The Revenue is expected to grow by 2.54% on average over the next years.
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
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.
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
A Price/Earnings ratio of 6.09 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 95.00% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 27.61. WBA is valued rather cheaply when compared to this.
The Price/Forward Earnings ratio is 7.61, which indicates a rather cheap valuation of WBA.
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 (37.13), we can say WBA is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.09 | ||
| Fwd PE | 7.61 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, WBA is valued cheaply inside the industry as 92.50% of the companies are valued more expensively.
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 | 17.6 | ||
| EV/EBITDA | 2.85 |
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 4.31%, which is a nice return.
Compared to an average industry Dividend Yield of 2.03, WBA pays a better dividend. On top of this WBA pays more dividend than 100.00% 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 2.32.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.31% |
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.
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.
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-27.15%
EPS Next 3Y-19.36%
11.63
+0.01 (+0.09%)
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-0.34%
Ins Owners0.64%
Ins Owner Change-9.83%
Market Cap10.07B
Analysts65.56
Price Target11.9 (2.32%)
Short Float %3.01%
Short Ratio2.72
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.31% |
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)1.27%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.09 | ||
| Fwd PE | 7.61 | ||
| P/S | 0.07 | ||
| P/FCF | 17.6 | ||
| P/OCF | 6.3 | ||
| P/B | 1.42 | ||
| P/tB | N/A | ||
| EV/EBITDA | 2.85 |
EPS(TTM)1.91
EY16.42%
EPS(NY)1.53
Fwd EY13.14%
FCF(TTM)0.66
FCFY5.68%
OCF(TTM)1.85
OCFY15.87%
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%