DiaSorin SpA – Value Analysis (MILAN:DIA) : November 13, 2017

Capitalcube gives DiaSorin SpA a score of 75.

Our analysis is based on comparing DiaSorin SpA with the following peers – bioMerieux SA, Biosynex SA, Omega Diagnostics Group PLC and NEL ASA (BIM-FR, ALBIO-FR, ODX-GB and NEL-NO).

Investment Outlook

DiaSorin SpA has a fundamental score of 75 and has a relative valuation of OVERVALUED.

Fundamental Score

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Company Overview

  • Compared to peers, relative underperformance last month is down from a median performance last year.
  • It currently trades at a Price/Book ratio of (6.13).
  • DIA-IT‘s operating performance is relatively good compared to its peers. The market currently does not expect high earnings growth relative to its peers but seems to expect the company to maintain its relatively high rates of return.
  • DIA-IT has relatively high profit margins while operating with median asset turns.
  • Changes in annual revenues are in line with its chosen peers but lags in terms of earnings suggesting that the company is less cost conscious and may be spending for growth.
  • DIA-IT‘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 gross and pre-tax margins suggest a differentiated product portfolio and tight control on operating costs relative to peers.
  • DIA-IT‘s revenue growth in recent years and current P/E ratio are both around their respective peer medians suggesting that historical performance and long-term growth expectations for the company are largely in sync.
  • The company’s level of capital investment suggests it might be under-investing in a business with above median returns.
  • DIA-IT has the financial and operating capacity to borrow quickly.

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Leverage & Liquidity

DIA-IT has the financial and operating capacity to borrow quickly.

  • With debt at a relatively low 1.06% of its enterprise value compared to an overall benchmark of 25% (Note: The peer median is currently 1.74%), and a well-cushioned interest coverage level of 52.06x, DIA-IT 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 NEL-NO.

DIA-IT has maintained its Quick & Able profile from the prior year-end.

  • DIA-IT‘s interest coverage has declined 16.46 points from last year’s high and is now below its four-year average interest coverage of 53.77.
  • While its interest coverage decreased to 52.06x from 68.52x (in 2015), its peer median increased during this period to 15.59x from 11.79x.
  • Interest coverage fell 20.26 points relative to peers.
  • DIA-IT‘s debt-EV is its highest over the last four years and compares to a low of 0.10% in 2015.
  • While its debt-EV increased to 1.06% from 0.09% (in 2015), its peer median decreased during this period to 1.74% from 2.79%.
  • Relative to peers, debt-EV rose 2.02 percentage points.

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Key Liquidity Items

Company Debt/Enterprise Value (%) Current Ratio Interest Coverage (x) Cash Flow To Total Debt (%)
bioMerieux SA 5.96 1.82 15.59 77.92
Biosynex SA 17.34 1.53 5.2 7.46
Omega Diagnostics Group PLC 1.74 2.91 17.38 436.94
NEL ASA 0 1.74 -13.31 999
DiaSorin S.p.A. 1.06 3.3 52.06 428.14
Peer Median 1.74 1.82 15.59 428.14
Best In Class 1.06 3.3 52.06 999

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Company Profile

DiaSorin SpA engages in the development, production, and marketing of reagent kits for in vitro diagnostics. It specializes in the provision of immunodiagnostics and molecular diagnostics solutions which meet the needs of the following clinical areas: infectious diseases, cardiac markers, bone metabolism, hepatitis and retrovirus, oncology and endocrinology. The company was founded in 1968 and is headquartered in Vercelli, Italy


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