Analogic Corp. – Value Analysis (NASDAQ:ALOG) : July 11, 2017

Capitalcube gives Analogic Corp. a score of 50.

Our analysis is based on comparing Analogic Corp. with the following peers – OSI Systems, Inc., L3 Technologies, Inc., Hologic, Inc., Boston Scientific Corporation, Varian Medical Systems, Inc., Agilent Technologies, Inc., Micron Solutions, Inc., Integer Holdings Corporation, General Electric Company and Sparton Corporation (OSIS-US, LLL-US, HOLX-US, BSX-US, VAR-US, A-US, MICR-US, ITGR-US, GE-US and SPA-US).

Investment Outlook

Analogic Corp. has a fundamental score of 50 and has a relative valuation of UNDERVALUED.

Fundamental Score

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Company Overview

  • Compared to peers, relative underperformance over the last year is in contrast with the more recent outperformance.
  • It trades at a lower Price/Book multiple (1.83) than its peer median (2.86).
  • The market expects faster earnings growth from ALOG-US than from its peers and also a turnaround in its current ROE.
  • ALOG-US has relatively low profit margins and median asset efficiency.
  • Compared with its chosen peers, the company’s annual revenues and earnings change at a slower rate, implying a lack of strategic focus and/or lack of execution success.
  • Over the last five years, ALOG-US‘s return on assets has eroded from above median to below median among its peers suggesting declining relative operating performance.
  • Company appears to give away relatively high gross margins to relatively high operating costs suggesting a differentiated product portfolio with low pre-tax margins relative to peers.
  • While ALOG-US‘s revenues have increased slower than peer median, the market currently gives the company a higher than peer median P/E ratio and may be factoring in some sort of a strategic play.
  • The company’s level of capital investment suggests it might be under-investing in a business with above median returns.
  • ALOG-US currently does not have any debt.

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Leverage & Liquidity

ALOG-US currently does not have any debt.

  • We consider the company to have a Quick & Able profile as it currently does not have any debt. In comparison, the median level of debt as percent of enterprise value for its peer group is currently 21.78%.
  • All 10 peers for the company have an outstanding debt balance.

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Key Liquidity Items

Company Debt/Enterprise Value (%) Current Ratio Interest Coverage (x) Cash Flow To Total Debt (%)
OSI Systems, Inc. 21.78 1.89 10.12 32.15
L3 Technologies, Inc. 20.8 1.74 6.1 35.01
Hologic, Inc. 23.51 0.86 3.62 3.21
Boston Scientific Corporation 14.04 0.87 5.49 17.49
Varian Medical Systems, Inc. 6.66 1.52 41.61 82.31
Agilent Technologies, Inc. 11.79 3.2 9.74 45.15
Micron Solutions, Inc. 34.37 1.18 -1.34 19.81
Integer Holdings Corporation 58.59 2.59 1.58 7.65
General Electric Company 36.7 1.34 2.53 7.82
Sparton Corporation 29.97 2.22 1.81 22.57
Analogic Corporation 0 5.65 No interest exp 999
Peer Median 21.78 1.74 5.49 22.57
Best In Class 6.66 5.65 No interest exp 999

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Company Profile

Analogic Corp. provides healthcare and security technology solutions to advance the practice of medicine and save lives. It operates through three segments: Medical Imaging, Ultrasound and Security Technology. The Medical Imaging segment includes systems and subsystems for computed tomography and magnetic resonance imaging medical imaging equipment as well as state-of-the-art, selenium-based detectors for screening of breast cancer and other diagnostic applications in mammography. The Ultrasound segment includes ultrasound systems and transducers primarily in the urology, surgery, anesthesia, and point-of-care markets. The Security Technology segment includes advanced threat detecting computed tomography systems utilizing its expertise in advanced imaging technology, primarily used in checked baggage screening at airports worldwide. The company was founded by Bernard Marshall Gordon in November 1967 and is headquartered in Peabody, MA.

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