SLEEP COUNTRY CANADA HOLDING (ZZZ.CA) Stock Fundamental Analysis
TSX:ZZZ - Toronto Stock Exchange - CA83125J1049 - Common Stock - Currency: CAD
We assign a fundamental rating of 5 out of 10 to ZZZ. ZZZ was compared to 16 industry peers in the Specialty Retail industry. ZZZ scores excellent on profitability, but there are some minor concerns on its financial health. ZZZ has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year ZZZ was profitable.
ZZZ had a positive operating cash flow in the past year.
In the past 5 years ZZZ has always been profitable.
In the past 5 years ZZZ always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 6.34%, ZZZ belongs to the top of the industry, outperforming 88.24% of the companies in the same industry.
The Return On Equity of ZZZ (15.47%) is better than 94.12% of its industry peers.
The Return On Invested Capital of ZZZ (9.72%) is better than 94.12% of its industry peers.
ZZZ had an Average Return On Invested Capital over the past 3 years of 11.93%. This is above the industry average of 8.38%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.34% | ||
| ROE | 15.47% | ||
| ROIC | 9.72% |
ROA(3y)8.73%
ROA(5y)7.85%
ROE(3y)21.83%
ROE(5y)20.26%
ROIC(3y)11.93%
ROIC(5y)10.96%
1.3 Margins
ZZZ's Profit Margin of 7.52% is amongst the best of the industry. ZZZ outperforms 82.35% of its industry peers.
ZZZ's Profit Margin has declined in the last couple of years.
The Operating Margin of ZZZ (13.01%) is better than 76.47% of its industry peers.
In the last couple of years the Operating Margin of ZZZ has declined.
The Gross Margin of ZZZ (37.67%) is comparable to the rest of the industry.
In the last couple of years the Gross Margin of ZZZ has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 13.01% | ||
| PM (TTM) | 7.52% | ||
| GM | 37.67% |
OM growth 3Y0.81%
OM growth 5Y-1.65%
PM growth 3Y-3.05%
PM growth 5Y-4.46%
GM growth 3Y6.81%
GM growth 5Y4.09%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so ZZZ is still creating some value.
ZZZ has less shares outstanding than it did 1 year ago.
ZZZ has less shares outstanding than it did 5 years ago.
ZZZ has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 2.43 indicates that ZZZ is not a great score, but indicates only limited risk for bankruptcy at the moment.
With a Altman-Z score value of 2.43, ZZZ perfoms like the industry average, outperforming 41.18% of the companies in the same industry.
The Debt to FCF ratio of ZZZ is 4.70, which is a neutral value as it means it would take ZZZ, 4.70 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 4.70, ZZZ is doing good in the industry, outperforming 64.71% of the companies in the same industry.
A Debt/Equity ratio of 1.00 indicates that ZZZ is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 1.00, ZZZ is doing worse than 64.71% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1 | ||
| Debt/FCF | 4.7 | ||
| Altman-Z | 2.43 |
ROIC/WACC1.23
WACC7.88%
2.3 Liquidity
ZZZ has a Current Ratio of 1.05. This is a normal value and indicates that ZZZ is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.05, ZZZ is doing worse than 76.47% of the companies in the same industry.
ZZZ has a Quick Ratio of 1.05. This is a bad value and indicates that ZZZ is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.44, ZZZ is doing worse than 70.59% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.05 | ||
| Quick Ratio | 0.44 |
3. Growth
3.1 Past
The earnings per share for ZZZ have decreased by -8.94% in the last year.
ZZZ shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 4.17% yearly.
ZZZ shows a small growth in Revenue. In the last year, the Revenue has grown by 3.90%.
Measured over the past years, ZZZ shows a quite strong growth in Revenue. The Revenue has been growing by 8.46% on average per year.
EPS 1Y (TTM)-8.94%
EPS 3Y2.66%
EPS 5Y4.17%
EPS Q2Q%28.57%
Revenue 1Y (TTM)3.9%
Revenue growth 3Y7.26%
Revenue growth 5Y8.46%
Sales Q2Q%7.04%
3.2 Future
ZZZ is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 11.00% yearly.
Based on estimates for the next years, ZZZ will show a small growth in Revenue. The Revenue will grow by 4.59% on average per year.
EPS Next Y-0.05%
EPS Next 2Y11%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year4.44%
Revenue Next 2Y4.59%
Revenue Next 3YN/A
Revenue Next 5YN/A
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.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 16.35, the valuation of ZZZ can be described as correct.
64.71% of the companies in the same industry are more expensive than ZZZ, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of ZZZ to the average of the S&P500 Index (26.35), we can say ZZZ is valued slightly cheaper.
A Price/Forward Earnings ratio of 13.46 indicates a correct valuation of ZZZ.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ZZZ indicates a somewhat cheap valuation: ZZZ is cheaper than 70.59% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of ZZZ to the average of the S&P500 Index (22.19), we can say ZZZ is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.35 | ||
| Fwd PE | 13.46 |
4.2 Price Multiples
ZZZ's Enterprise Value to EBITDA ratio is in line with the industry average.
Based on the Price/Free Cash Flow ratio, ZZZ is valued a bit cheaper than 64.71% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 11.08 | ||
| EV/EBITDA | 8.5 |
4.3 Compensation for Growth
The decent profitability rating of ZZZ may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)3.92
EPS Next 2Y11%
EPS Next 3YN/A
5. Dividend
5.1 Amount
ZZZ has a Yearly Dividend Yield of 2.71%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 4.79, ZZZ pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.40, ZZZ has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.71% |
5.2 History
The dividend of ZZZ has a limited annual growth rate of 5.35%.
ZZZ has paid a dividend for at least 10 years, which is a reliable track record.
ZZZ has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)5.35%
Div Incr Years3
Div Non Decr Years3
5.3 Sustainability
45.12% of the earnings are spent on dividend by ZZZ. This is a bit on the high side, but may be sustainable.
ZZZ's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP45.12%
EPS Next 2Y11%
EPS Next 3YN/A
TSX:ZZZ (10/2/2024, 7:00:00 PM)
34.99
0 (0%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners44.56%
Inst Owner ChangeN/A
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap1.19B
Analysts48.89
Price Target35.7 (2.03%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.71% |
Yearly Dividend0.94
Dividend Growth(5Y)5.35%
DP45.12%
Div Incr Years3
Div Non Decr Years3
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)13.99%
Min EPS beat(2)-22.63%
Max EPS beat(2)50.61%
EPS beat(4)2
Avg EPS beat(4)7.83%
Min EPS beat(4)-22.63%
Max EPS beat(4)50.61%
EPS beat(8)3
Avg EPS beat(8)1.45%
EPS beat(12)7
Avg EPS beat(12)13.69%
EPS beat(16)11
Avg EPS beat(16)20.9%
Revenue beat(2)1
Avg Revenue beat(2)0.65%
Min Revenue beat(2)-1.73%
Max Revenue beat(2)3.04%
Revenue beat(4)2
Avg Revenue beat(4)0.22%
Min Revenue beat(4)-2.62%
Max Revenue beat(4)3.04%
Revenue beat(8)4
Avg Revenue beat(8)-0.69%
Revenue beat(12)8
Avg Revenue beat(12)1.76%
Revenue beat(16)12
Avg Revenue beat(16)5.26%
PT rev (1m)0%
PT rev (3m)12.18%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.96%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.04%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.35 | ||
| Fwd PE | 13.46 | ||
| P/S | 1.24 | ||
| P/FCF | 11.08 | ||
| P/OCF | 8.05 | ||
| P/B | 2.56 | ||
| P/tB | N/A | ||
| EV/EBITDA | 8.5 |
EPS(TTM)2.14
EY6.12%
EPS(NY)2.6
Fwd EY7.43%
FCF(TTM)3.16
FCFY9.02%
OCF(TTM)4.34
OCFY12.42%
SpS28.13
BVpS13.68
TBVpS-3.11
PEG (NY)N/A
PEG (5Y)3.92
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.34% | ||
| ROE | 15.47% | ||
| ROCE | 12.98% | ||
| ROIC | 9.72% | ||
| ROICexc | 10.08% | ||
| ROICexgc | 26.37% | ||
| OM | 13.01% | ||
| PM (TTM) | 7.52% | ||
| GM | 37.67% | ||
| FCFM | 11.22% |
ROA(3y)8.73%
ROA(5y)7.85%
ROE(3y)21.83%
ROE(5y)20.26%
ROIC(3y)11.93%
ROIC(5y)10.96%
ROICexc(3y)12.73%
ROICexc(5y)11.66%
ROICexgc(3y)35.45%
ROICexgc(5y)32.04%
ROCE(3y)15.93%
ROCE(5y)14.63%
ROICexcg growth 3Y-1.09%
ROICexcg growth 5Y-21.13%
ROICexc growth 3Y-0.23%
ROICexc growth 5Y-4.67%
OM growth 3Y0.81%
OM growth 5Y-1.65%
PM growth 3Y-3.05%
PM growth 5Y-4.46%
GM growth 3Y6.81%
GM growth 5Y4.09%
F-Score8
Asset Turnover0.84
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1 | ||
| Debt/FCF | 4.7 | ||
| Debt/EBITDA | 2.38 | ||
| Cap/Depr | 57.02% | ||
| Cap/Sales | 4.22% | ||
| Interest Coverage | 4.38 | ||
| Cash Conversion | 75.66% | ||
| Profit Quality | 149.15% | ||
| Current Ratio | 1.05 | ||
| Quick Ratio | 0.44 | ||
| Altman-Z | 2.43 |
F-Score8
WACC7.88%
ROIC/WACC1.23
Cap/Depr(3y)40.46%
Cap/Depr(5y)43.49%
Cap/Sales(3y)2.89%
Cap/Sales(5y)3.19%
Profit Quality(3y)147.02%
Profit Quality(5y)172.35%
High Growth Momentum
Growth
EPS 1Y (TTM)-8.94%
EPS 3Y2.66%
EPS 5Y4.17%
EPS Q2Q%28.57%
EPS Next Y-0.05%
EPS Next 2Y11%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)3.9%
Revenue growth 3Y7.26%
Revenue growth 5Y8.46%
Sales Q2Q%7.04%
Revenue Next Year4.44%
Revenue Next 2Y4.59%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y-2.53%
EBIT growth 3Y8.13%
EBIT growth 5Y6.67%
EBIT Next Year59.38%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-38.69%
FCF growth 3Y-10.86%
FCF growth 5Y21.99%
OCF growth 1Y-21.16%
OCF growth 3Y-3.94%
OCF growth 5Y17.72%