AngioDynamics, Inc. – Value Analysis (NASDAQ:ANGO) : December 9, 2016

Capitalcube gives AngioDynamics, Inc. a score of 19.

Our analysis is based on comparing AngioDynamics, Inc. with the following peers – Vascular Solutions, Inc., LeMaitre Vascular, Inc., Merit Medical Systems, Inc., C. R. Bard, Inc., Teleflex Incorporated, ICU Medical, Inc., Boston Scientific Corporation and Johnson & Johnson (VASC-US, LMAT-US, MMSI-US, BCR-US, TFX-US, ICUI-US, BSX-US and JNJ-US).

Investment Outlook

AngioDynamics, Inc. has a fundamental score of 19 and has a relative valuation of UNDERVALUED.

Fundamental Score

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Company Overview

  • Compared to peers, relative outperformance over the last year has faded more recently.
  • AngioDynamics, Inc. trades at a lower Price/Book multiple (1.24) than its peer median (4.15).
  • ANGO-US‘s EBITDA-based price multiple implies around peer median growth. The market does not seem to expect much improvement in the company’s below peer median EBITDA-based returns.
  • ANGO-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.
  • ANGO-US‘s return on assets currently and over the past five years has trailed the peer median and suggests the company might be operationally challenged relative to its peers.
  • The company’s relatively low gross and pre-tax margins suggest a non-differentiated product portfolio and not much control on operating costs relative to peers.
  • While ANGO-US‘s revenues growth has been below the peer median in the last few years, the market still gives the stock a Price/EBITDA ratio that is around peer median and seems to see the company as a long-term strategic bet.
  • The company’s relatively low level of capital investment and below peer median returns on capital suggest that the company is in maintenance mode.
  • ANGO-US has the financial and operating capacity to borrow quickly.

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Leverage & Liquidity

ANGO-US has the financial and operating capacity to borrow quickly.

  • With debt at a relatively low 17.20% of its enterprise value compared to an overall benchmark of 25% (Note: The peer median is currently 9.66%), and a well-cushioned interest coverage level of 4.29x, ANGO-US can probably borrow quickly. We classify the company as Quick & Able in terms of its capacity to raise additional debt.
  • Of the 8 chosen peers for the company, only 5 of the stocks have an outstanding debt balance. Companies with no debt include VASC-US, LMAT-US and ICUI-US.

ANGO-US has moved to a Quick & Able from a relatively high liquidity profile at the recent year-end.

  • ANGO-US‘s interest coverage is less than (but within one standard deviation of) its five-year average interest coverage of 9.49x.
  • Though its interest coverage has remained relatively stable at 4.29x compared to 2016, its peer median has decreased to 17.97x from 20.77x during this period.
  • Interest coverage rose 2.80 points relative to peers.
  • ANGO-US‘s debt-EV is its lowest relative to the last five years and compares to a high of 28.50% in 2013.
  • Though its debt-EV decreased to 17.20% from 23.21% (in 2016), its peer median remained relatively stable during this period at 9.66%.
  • Relative to peers, debt-EV fell 5.91 percentage points.

Access the detailed analysis for AngioDynamics, Inc.

Key Liquidity Items

Company Debt/Enterprise Value (%) Current Ratio Interest Coverage (x) Cash Flow To Total Debt (%)
Vascular Solutions, Inc. 0 6.37 No interest exp 999
LeMaitre Vascular, Inc. 0 5.66 No interest exp 999
Merit Medical Systems, Inc. 23.52 2.71 4.04 23.69
C. R. Bard, Inc. 9.66 2.63 17.97 60.23
Teleflex Incorporated 12.76 2.57 7.12 35.06
ICU Medical, Inc. 0 15.47 No interest exp 999
Boston Scientific Corporation 14.43 1.05 4.9 6.44
Johnson & Johnson 8.76 2.73 27.65 72.41
AngioDynamics, Inc. 17.2 2.33 4.29 29.05
Peer Median 9.66 2.71 17.97 60.23
Best In Class 8.76 15.47 No interest exp 999

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Company Profile

AngioDynamics, Inc. engages in the business of medical devices. Its activities include design, manufactures, and sale of medical, surgical and diagnostic devices. The company focuses on devices in the field of vascular access, peripheral vascular, oncology, and surgery. AngioDynamics was founded by Eamonn P. Hobbs in 1988 and is headquartered in Latham, NY.

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