Data Modul AG – Value Analysis (XETRA:DAM) : October 6, 2017

Capitalcube gives Data Modul AG a score of 75.

Our analysis is based on comparing Data Modul AG with the following peers – Muhlbauer Holding AG & Co. KGaA, First Sensor AG, InTiCa Systems AG and Schweizer Electronic AG (MUB-DE, SIS-DE, IS7-DE and SCE-DE).

Investment Outlook

Data Modul AG has a fundamental score of 75 and has a relative valuation of OVERVALUED.

Fundamental Score

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Company Overview

  • With respect to peers, relative outperformance over the last year is in contrast to the more recent underperformance.
  • It currently trades at a Price/Book ratio of (3.70).
  • We classify DAM-DE as Harvesting because of the market’s relatively low growth expectations despite its relatively high returns.
  • DAM-DE has a successful operating model with relatively high net profit margins and asset turns.
  • Change in the company’s annual revenues seems to be coming at the expense of earnings.
  • DAM-DE‘s return on assets currently and over the past five years suggest that its relatively high operating returns are sustainable.
  • The company’s relatively high pre-tax margin suggests tight control on operating costs versus peers.
  • While DAM-DE‘s revenues growth in recent years has been around the peer median, the stock’s below peer median P/E ratio suggests that the market likely sees the company’s long-term growth prospects to be fading.
  • The company’s level of capital investment suggests it might be under-investing in a business with above median returns.
  • DAM-DE has the financial and operating capacity to borrow quickly.

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Leverage & Liquidity

DAM-DE has the financial and operating capacity to borrow quickly.

  • With debt at a relatively low 2.59% of its enterprise value compared to an overall benchmark of 25% (Note: The peer median is currently 13.93%), and a well-cushioned interest coverage level of 198.37x, DAM-DE can probably borrow quickly. We classify the company as Quick & Able in terms of its capacity to raise additional debt.
  • Of the 4 chosen peers for the company, only 3 of the stocks have an outstanding debt balance. Companies with no debt include MUB-DE.

DAM-DE has maintained its Quick & Able profile from the recent year-end.

  • DAM-DE‘s interest coverage is its highest relative to the last five years and compares to a low of 18.33x in 2012.
  • While its interest coverage increased to 198.37x from 167.57x (in 2016), its peer median decreased during this period to 3.69x from 5.44x.
  • Interest coverage rose 32.55 points relative to peers.
  • DAM-DE‘s debt-EV has increased 0.70 percentage points from last year’s low but is still below its five-year average debt-EV of 16.54.
  • The increase in its debt-EV to 2.59% from 1.89% (in 2016) was also accompanied by an increase in its peer median during this period to 13.93% from 12.72%.
  • Relative to peers, debt-EV fell 0.51 percentage points.

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Key Liquidity Items

Company Debt/Enterprise Value (%) Current Ratio Interest Coverage (x) Cash Flow To Total Debt (%)
Muhlbauer Holding AG & Co. KGaA 0 6.16 45592 999
First Sensor AG 29.06 3.02 3.69 29.2
InTiCa Systems AG 40.52 1.39 2 24.17
Schweizer Electronic AG 13.93 2.13 0.06 57.69
Data Modul AG 2.59 2.88 198.37 223.08
Peer Median 13.93 2.88 3.69 57.69
Best In Class 2.59 6.16 45592 999

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Company Profile

Data Modul AG engages in the display technology business. The company develops, manufactures and distributes innovative flatbed displays, monitors, electronic subassemblies and complete information systems. It operates through two segments: Displays and Systems. The Displays segment volves the purchase and distribution of DATA MODUL displays, easyTOUCH displays, electronic subassemblies and custom products for use in industrial applications and the automotive industry. The Systems segment comprises selling of easyPanel and easyEmbedded Solutions and special monitors for marine navigation and medical device applications. Data Modul was founded by Walter Eichner on June 28, 1972 and is headquartered in Munich, Germany.

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