Forterra, Inc. – Value Analysis (NASDAQ:FRTA) : August 4, 2017

Capitalcube gives Forterra, Inc. a score of 25.

Investment Outlook

Forterra, Inc. has a fundamental score of 25 and has a relative valuation of NEUTRAL.

Fundamental Score

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Company Overview

  • FRTA-US has traded publicly for less than a year.
  • It’s current Price/Book of 5.05 is about median in its peer group.
  • FRTA-US‘s EBITDA-based price multiple implies around peer median future growth. The market seems to expect the company to maintain the peer median EBITDA-based return it currently generates.
  • FRTA-US‘s relative asset efficiency and net profit margins are both around the median level.
  • Changes in the company’s annual revenue and earnings are around the median among its peers.
  • FRTA-US seems too levered to raise additional debt.

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Leverage & Liquidity

FRTA-US would seem to have a hard time raising additional debt.

  • With debt at a relatively high 49.83% of its enterprise value compared to an overall benchmark of 25% (Note: The peer median is currently 49.83%), and relatively tight interest coverage level of 0.62x, FRTA-US would have a hard time raising much additional debt. The company has a Constrained profile in terms of its ability to take on further debt.
  • None of the 0 chosen peers for the company have an outstanding debt balance.

FRTA-US has maintained its Limited Flexibility profile from the recent year-end.

  • FRTA-US‘s interest coverage is similar to last year’s high of 0.62x, which compares to a low of -0.99x in 2015.
  • Compared to 2016, interest coverage has remained relatively stable for both the company (0.62x) and the peer median (0.62x).
  • FRTA-US‘s debt-EV is its highest relative to the last five years and compares to a low of 44.99% in 2016.
  • The increase in its debt-EV to 49.83% from 44.99% (in 2016) was also accompanied by an increase in its peer median during this period to 49.83% from 44.99%.

Access the detailed analysis for Forterra, Inc.

Key Liquidity Items

Company Debt/Enterprise Value (%) Current Ratio Interest Coverage (x) Cash Flow To Total Debt (%)
Forterra, Inc. 49.83 2.47 0.62 6.89
Peer Median 49.83 2.47 0.62 6.89
Best In Class 49.83 2.47 0.62 6.89

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Company Profile

Forterra, Inc. manufacturers and sales pipe and precast products. It provides critical infrastructure components for a broad spectrum of construction projects across residential, non-residential and infrastructure markets. Forterra operates through the flowing segments: Drainage Pipe & products, Water Pipe & products and Bricks. The company was founded in 2005 and is headquartered in Irving, TX.

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