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. While ZZZ belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. ZZZ has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
In the past year ZZZ was profitable.
ZZZ had a positive operating cash flow in the past year.
ZZZ had positive earnings in each of the past 5 years.
ZZZ had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
ZZZ has a better Return On Assets (6.34%) than 88.24% of its industry peers.
The Return On Equity of ZZZ (15.47%) is better than 94.12% of its industry peers.
ZZZ has a Return On Invested Capital of 9.72%. This is amongst the best in the industry. ZZZ outperforms 94.12% of its industry peers.
The Average Return On Invested Capital over the past 3 years for ZZZ is above the industry average of 8.16%.
| 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
With an excellent Profit Margin value of 7.52%, ZZZ belongs to the best of the industry, outperforming 82.35% of the companies in the same industry.
In the last couple of years the Profit Margin of ZZZ has declined.
Looking at the Operating Margin, with a value of 13.01%, ZZZ is in the better half of the industry, outperforming 76.47% of the companies in the same industry.
In the last couple of years the Operating Margin of ZZZ has declined.
ZZZ's Gross Margin of 37.67% is in line compared to the rest of the industry. ZZZ outperforms 47.06% of its industry peers.
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
ZZZ has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
Compared to 1 year ago, ZZZ has less shares outstanding
Compared to 5 years ago, ZZZ has less shares outstanding
Compared to 1 year ago, ZZZ has a worse debt to assets ratio.
2.2 Solvency
ZZZ has an Altman-Z score of 2.43. This is not the best score and indicates that ZZZ is in the grey zone with still only limited risk for bankruptcy at the moment.
ZZZ has a Altman-Z score of 2.43. This is comparable to the rest of the industry: ZZZ outperforms 41.18% of its industry peers.
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.
The Debt to FCF ratio of ZZZ (4.70) is better than 64.71% of its industry peers.
ZZZ has a Debt/Equity ratio of 1.00. This is a neutral value indicating ZZZ is somewhat dependend on debt financing.
ZZZ's Debt to Equity ratio of 1.00 is on the low side compared to the rest of the industry. ZZZ is outperformed by 64.71% of its industry peers.
| 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.
ZZZ has a worse Quick ratio (0.44) than 70.59% of its industry peers.
| 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.
The Earnings Per Share has been growing slightly by 4.17% on average over the past years.
ZZZ shows a small growth in Revenue. In the last year, the Revenue has grown by 3.90%.
The Revenue has been growing by 8.46% on average over the past years. This is quite good.
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
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 16.35, ZZZ is valued correctly.
Based on the Price/Earnings ratio, ZZZ is valued a bit cheaper than 64.71% of the companies in the same industry.
ZZZ's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.35.
ZZZ is valuated correctly with a Price/Forward Earnings ratio of 13.46.
Based on the Price/Forward Earnings ratio, ZZZ is valued a bit cheaper than the industry average as 70.59% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 37.54. ZZZ is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.35 | ||
| Fwd PE | 13.46 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as ZZZ.
ZZZ's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. ZZZ is 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%.
ZZZ's Dividend Yield is a higher than the industry average which is at 4.72.
ZZZ's Dividend Yield is comparable with the S&P500 average which is at 2.36.
| 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 been paying a dividend for at least 10 years, so it has 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.
The dividend of ZZZ is growing, but earnings are growing more, so the dividend growth is 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%