WIPRO LTD-ADR (WIT) Stock Fundamental Analysis
NYSE:WIT - New York Stock Exchange, Inc. - US97651M1099 - ADR - Currency: USD
WIT gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 82 industry peers in the IT Services industry. WIT is in great health and has no worries on liquidiy or solvency at all, but the profibility rating is only average. WIT has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
WIT had positive earnings in the past year.
In the past year WIT had a positive cash flow from operations.
In the past 5 years WIT has always been profitable.
WIT had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
WIT has a better Return On Assets (10.30%) than 84.15% of its industry peers.
Looking at the Return On Equity, with a value of 15.49%, WIT is in the better half of the industry, outperforming 75.61% of the companies in the same industry.
The Return On Invested Capital of WIT (10.39%) is better than 71.95% of its industry peers.
WIT had an Average Return On Invested Capital over the past 3 years of 10.49%. This is significantly below the industry average of 21.60%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.3% | ||
| ROE | 15.49% | ||
| ROIC | 10.39% |
ROA(3y)9.82%
ROA(5y)10.75%
ROE(3y)15.04%
ROE(5y)16.64%
ROIC(3y)10.49%
ROIC(5y)11.45%
1.3 Margins
Looking at the Profit Margin, with a value of 15.08%, WIT belongs to the top of the industry, outperforming 91.46% of the companies in the same industry.
In the last couple of years the Profit Margin of WIT has declined.
With an excellent Operating Margin value of 16.99%, WIT belongs to the best of the industry, outperforming 90.24% of the companies in the same industry.
WIT's Operating Margin has been stable in the last couple of years.
The Gross Margin of WIT (30.34%) is worse than 60.98% of its industry peers.
WIT's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 16.99% | ||
| PM (TTM) | 15.08% | ||
| GM | 30.34% |
OM growth 3Y-0.16%
OM growth 5Y0.38%
PM growth 3Y-1.54%
PM growth 5Y-1.54%
GM growth 3Y1.04%
GM growth 5Y1.44%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so WIT is creating value.
Compared to 1 year ago, WIT has more shares outstanding
WIT has less shares outstanding than it did 5 years ago.
The debt/assets ratio for WIT is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 6.03 indicates that WIT is not in any danger for bankruptcy at the moment.
WIT's Altman-Z score of 6.03 is fine compared to the rest of the industry. WIT outperforms 78.05% of its industry peers.
WIT has a debt to FCF ratio of 1.02. This is a very positive value and a sign of high solvency as it would only need 1.02 years to pay back of all of its debts.
WIT's Debt to FCF ratio of 1.02 is amongst the best of the industry. WIT outperforms 82.93% of its industry peers.
A Debt/Equity ratio of 0.17 indicates that WIT is not too dependend on debt financing.
WIT's Debt to Equity ratio of 0.17 is fine compared to the rest of the industry. WIT outperforms 63.41% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.17 | ||
| Debt/FCF | 1.02 | ||
| Altman-Z | 6.03 |
ROIC/WACC1.84
WACC5.64%
2.3 Liquidity
A Current Ratio of 2.40 indicates that WIT has no problem at all paying its short term obligations.
The Current ratio of WIT (2.40) is better than 73.17% of its industry peers.
A Quick Ratio of 2.39 indicates that WIT has no problem at all paying its short term obligations.
Looking at the Quick ratio, with a value of 2.39, WIT is in the better half of the industry, outperforming 73.17% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.4 | ||
| Quick Ratio | 2.39 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 22.77% over the past year.
WIT shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 8.52% yearly.
Looking at the last year, WIT shows a small growth in Revenue. The Revenue has grown by 0.41% in the last year.
Measured over the past years, WIT shows a small growth in Revenue. The Revenue has been growing by 7.86% on average per year.
EPS 1Y (TTM)22.77%
EPS 3Y3.89%
EPS 5Y8.52%
EPS Q2Q%20.19%
Revenue 1Y (TTM)0.41%
Revenue growth 3Y4.05%
Revenue growth 5Y7.86%
Sales Q2Q%1.2%
3.2 Future
Based on estimates for the next years, WIT will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.00% on average per year.
Based on estimates for the next years, WIT will show a small growth in Revenue. The Revenue will grow by 4.74% on average per year.
EPS Next Y6.18%
EPS Next 2Y6.49%
EPS Next 3Y5.02%
EPS Next 5Y8%
Revenue Next Year-0.08%
Revenue Next 2Y2.59%
Revenue Next 3Y3.42%
Revenue Next 5Y4.74%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same 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
WIT is valuated rather expensively with a Price/Earnings ratio of 20.00.
Compared to the rest of the industry, the Price/Earnings ratio of WIT indicates a somewhat cheap valuation: WIT is cheaper than 67.07% of the companies listed in the same industry.
WIT is valuated rather cheaply when we compare the Price/Earnings ratio to 27.54, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 18.17 indicates a rather expensive valuation of WIT.
Based on the Price/Forward Earnings ratio, WIT is valued a bit cheaper than 65.85% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of WIT to the average of the S&P500 Index (36.44), we can say WIT is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20 | ||
| Fwd PE | 18.17 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, WIT is valued cheaper than 80.49% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of WIT indicates a somewhat cheap valuation: WIT is cheaper than 76.83% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 17.38 | ||
| EV/EBITDA | 9.97 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates WIT does not grow enough to justify the current Price/Earnings ratio.
The decent profitability rating of WIT may justify a higher PE ratio.
PEG (NY)3.23
PEG (5Y)2.35
EPS Next 2Y6.49%
EPS Next 3Y5.02%
5. Dividend
5.1 Amount
With a yearly dividend of 0.03%, WIT is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 2.39, WIT pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.35, WIT's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.03% |
5.2 History
The dividend of WIT is nicely growing with an annual growth rate of 38.62%!
WIT has paid a dividend for at least 10 years, which is a reliable track record.
The dividend of WIT decreased recently.
Dividend Growth(5Y)38.62%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
46.61% of the earnings are spent on dividend by WIT. This is a bit on the high side, but may be sustainable.
The dividend of WIT is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP46.61%
EPS Next 2Y6.49%
EPS Next 3Y5.02%
3
-0.06 (-1.96%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners13.01%
Inst Owner Change0.13%
Ins Owners60.82%
Ins Owner ChangeN/A
Market Cap31.41B
Analysts52.34
Price Target2.86 (-4.67%)
Short Float %2.26%
Short Ratio13.87
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.03% |
Yearly Dividend0.07
Dividend Growth(5Y)38.62%
DP46.61%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)2.25%
Min EPS beat(2)1.4%
Max EPS beat(2)3.1%
EPS beat(4)3
Avg EPS beat(4)1.55%
Min EPS beat(4)-2.73%
Max EPS beat(4)4.44%
EPS beat(8)3
Avg EPS beat(8)-0.8%
EPS beat(12)4
Avg EPS beat(12)-2.31%
EPS beat(16)4
Avg EPS beat(16)-3.14%
Revenue beat(2)0
Avg Revenue beat(2)-2.67%
Min Revenue beat(2)-3.42%
Max Revenue beat(2)-1.93%
Revenue beat(4)0
Avg Revenue beat(4)-2.65%
Min Revenue beat(4)-3.42%
Max Revenue beat(4)-1.93%
Revenue beat(8)0
Avg Revenue beat(8)-2.99%
Revenue beat(12)0
Avg Revenue beat(12)-3.13%
Revenue beat(16)0
Avg Revenue beat(16)-2.9%
PT rev (1m)-1.91%
PT rev (3m)-15.44%
EPS NQ rev (1m)-1.02%
EPS NQ rev (3m)9.17%
EPS NY rev (1m)-0.01%
EPS NY rev (3m)2.72%
Revenue NQ rev (1m)0.34%
Revenue NQ rev (3m)0.32%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-5.64%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20 | ||
| Fwd PE | 18.17 | ||
| P/S | 3.03 | ||
| P/FCF | 17.38 | ||
| P/OCF | 15.86 | ||
| P/B | 3.11 | ||
| P/tB | 5.26 | ||
| EV/EBITDA | 9.97 |
EPS(TTM)0.15
EY5%
EPS(NY)0.17
Fwd EY5.5%
FCF(TTM)0.17
FCFY5.76%
OCF(TTM)0.19
OCFY6.3%
SpS0.99
BVpS0.96
TBVpS0.57
PEG (NY)3.23
PEG (5Y)2.35
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.3% | ||
| ROE | 15.49% | ||
| ROCE | 15.54% | ||
| ROIC | 10.39% | ||
| ROICexc | 20.03% | ||
| ROICexgc | 52.69% | ||
| OM | 16.99% | ||
| PM (TTM) | 15.08% | ||
| GM | 30.34% | ||
| FCFM | 17.45% |
ROA(3y)9.82%
ROA(5y)10.75%
ROE(3y)15.04%
ROE(5y)16.64%
ROIC(3y)10.49%
ROIC(5y)11.45%
ROICexc(3y)18.66%
ROICexc(5y)20.95%
ROICexgc(3y)47.85%
ROICexgc(5y)48.79%
ROCE(3y)15.2%
ROCE(5y)16.7%
ROICexcg growth 3Y6.71%
ROICexcg growth 5Y4%
ROICexc growth 3Y1.11%
ROICexc growth 5Y-3.29%
OM growth 3Y-0.16%
OM growth 5Y0.38%
PM growth 3Y-1.54%
PM growth 5Y-1.54%
GM growth 3Y1.04%
GM growth 5Y1.44%
F-Score6
Asset Turnover0.68
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.17 | ||
| Debt/FCF | 1.02 | ||
| Debt/EBITDA | 0.83 | ||
| Cap/Depr | 50.99% | ||
| Cap/Sales | 1.66% | ||
| Interest Coverage | 17.82 | ||
| Cash Conversion | 94.35% | ||
| Profit Quality | 115.67% | ||
| Current Ratio | 2.4 | ||
| Quick Ratio | 2.39 | ||
| Altman-Z | 6.03 |
F-Score6
WACC5.64%
ROIC/WACC1.84
Cap/Depr(3y)41.69%
Cap/Depr(5y)52.21%
Cap/Sales(3y)1.49%
Cap/Sales(5y)2.03%
Profit Quality(3y)123.26%
Profit Quality(5y)112.51%
High Growth Momentum
Growth
EPS 1Y (TTM)22.77%
EPS 3Y3.89%
EPS 5Y8.52%
EPS Q2Q%20.19%
EPS Next Y6.18%
EPS Next 2Y6.49%
EPS Next 3Y5.02%
EPS Next 5Y8%
Revenue 1Y (TTM)0.41%
Revenue growth 3Y4.05%
Revenue growth 5Y7.86%
Sales Q2Q%1.2%
Revenue Next Year-0.08%
Revenue Next 2Y2.59%
Revenue Next 3Y3.42%
Revenue Next 5Y4.74%
EBIT growth 1Y8.98%
EBIT growth 3Y3.88%
EBIT growth 5Y8.27%
EBIT Next Year20.12%
EBIT Next 3Y9.99%
EBIT Next 5Y9.54%
FCF growth 1Y1.02%
FCF growth 3Y19.5%
FCF growth 5Y14.93%
OCF growth 1Y2.56%
OCF growth 3Y15.21%
OCF growth 5Y10.98%