SLEEP COUNTRY CANADA HOLDING (ZZZ.CA) Stock Fundamental Analysis
TSX:ZZZ - Toronto Stock Exchange - CA83125J1049 - Common Stock - Currency: CAD
Taking everything into account, ZZZ scores 5 out of 10 in our fundamental rating. ZZZ was compared to 17 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
ZZZ had positive earnings in the past year.
ZZZ had a positive operating cash flow in the past year.
Each year in the past 5 years ZZZ has been profitable.
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.
Looking at the Return On Invested Capital, with a value of 9.72%, ZZZ belongs to the top of the industry, outperforming 94.12% of the companies in the same industry.
ZZZ had an Average Return On Invested Capital over the past 3 years of 11.93%. This is significantly above the industry average of 6.10%.
| 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.
In the last couple of years the Profit Margin of ZZZ has declined.
ZZZ's Operating Margin of 13.01% is fine compared to the rest of the industry. ZZZ outperforms 76.47% of its industry peers.
In the last couple of years the Operating Margin of ZZZ has declined.
With a Gross Margin value of 37.67%, ZZZ perfoms like the industry average, outperforming 47.06% of the companies in the same industry.
ZZZ's Gross Margin has improved in the last couple of years.
| 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.
The number of shares outstanding for ZZZ has been reduced compared to 5 years ago.
Compared to 1 year ago, ZZZ has a worse debt to assets ratio.
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.
Looking at the Altman-Z score, with a value of 2.43, ZZZ is in line with its industry, outperforming 41.18% of the companies in the same industry.
ZZZ has a debt to FCF ratio of 4.70. This is a neutral value as ZZZ would need 4.70 years to pay back of 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.
ZZZ has a Debt/Equity ratio of 1.00. This is a neutral value indicating ZZZ is somewhat dependend on debt financing.
ZZZ has a Debt to Equity ratio of 1.00. This is in the lower half of the industry: ZZZ underperforms 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
A Current Ratio of 1.05 indicates that ZZZ should not have too much problems paying its short term obligations.
ZZZ has a worse Current ratio (1.05) than 76.47% of its industry peers.
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.
With a Quick ratio value of 0.44, ZZZ is not doing good in the industry: 70.59% of the companies in the same industry are doing better.
| 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.
Measured over the past 5 years, ZZZ shows a small growth in Earnings Per Share. The EPS has been growing by 4.17% on average per year.
The Revenue has been growing slightly by 3.90% in the past year.
ZZZ shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 8.46% yearly.
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.
The Revenue is expected to grow by 4.59% on average over the next years.
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
Based on the Price/Earnings ratio of 16.35, the valuation of ZZZ can be described as correct.
Compared to the rest of the industry, the Price/Earnings ratio of ZZZ indicates a somewhat cheap valuation: ZZZ is cheaper than 64.71% of the companies listed in the same industry.
ZZZ's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 25.82.
ZZZ is valuated correctly with a Price/Forward Earnings ratio of 13.46.
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.
The average S&P500 Price/Forward Earnings ratio is at 21.76. ZZZ is valued slightly cheaper when compared to this.
| 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
ZZZ has a very decent profitability rating, which 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
With a Yearly Dividend Yield of 2.71%, ZZZ has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 6.65, ZZZ pays a bit more dividend than its industry peers.
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
ZZZ pays out 45.12% of its income as dividend. 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%