Capitalcube gives Luxoft Holding, Inc. a score of 69.
Our analysis is based on comparing Luxoft Holding, Inc. with the following peers – DXC Technology Co., EPAM Systems, Inc., Infosys Limited Sponsored ADR, Accenture Plc Class A and Cognizant Technology Solutions Corporation Class A (DXC-US, EPAM-US, INFY-US, ACN-US and CTSH-US).
Luxoft Holding, Inc. has a fundamental score of 69 and has a relative valuation of OVERVALUED.
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- Considering peers, relative underperformance over the last year and the last month suggest a lagging position.
- It trades at a lower Price/Book multiple (3.38) than its peer median (4.48).
- The market expects LXFT-US to grow at about the same rate as the peers and to maintain the median returns it currently generates.
- LXFT-US‘s median net profit margins and relatively high asset efficiency give it some operating leverage.
- Changes in annual revenues (relative to peers) are better than the change in its earnings (relative to peers), implying the company is focused more on revenues.
- Over the last five years, LXFT-US‘s return on assets has declined from above median to about median among its peers, indicating declining relative operating performance.
- The company’s median gross margin and relatively low pre-tax margin suggest high operating costs versus peers.
- While LXFT-US‘s revenues in recent years have grown faster than the peer median, the market gives the stock a P/E ratio that is around peer median suggesting that the market has some questions about the company’s long-term strategy.
- The company’s level of capital investment seems appropriate to support the company’s growth.
- LXFT-US has the financial and operating capacity to borrow quickly.
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Leverage & Liquidity
LXFT-US has the financial and operating capacity to borrow quickly.
- With debt at a relatively low 0.03% of its enterprise value compared to an overall benchmark of 25% (Note: The peer median is currently 0.03%), and a well-cushioned interest coverage level of 765.57x, LXFT-US can probably borrow quickly. We classify the company as Quick & Able in terms of its capacity to raise additional debt.
- Of the 5 chosen peers for the company, only 4 of the stocks have an outstanding debt balance. Companies with no debt include INFY-US.
LXFT-US has maintained its Quick & Able profile from the prior year-end.
- LXFT-US‘s interest coverage has declined 233.43 points from last year’s high but remains above its four-year average interest coverage of 305.33.
- While its interest coverage decreased to 765.57x from 999x (in 2016), its peer median increased during this period to 342.40x from 303.24x.
- Interest coverage fell 272.59 points relative to peers.
- LXFT-US‘s debt-EV is similar to last year’s low of 0.02% and remains below the 2015 high of 1.82%.
- Though its debt-EV has remained relatively stable at 0.03% compared to 2016, its peer median has decreased to 0.03% from 0.93% during this period.
- Relative to peers, debt-EV rose 0.90 percentage points.
Access the detailed analysis for Luxoft Holding, Inc.
Key Liquidity Items
|Company||Debt/Enterprise Value (%)||Current Ratio||Interest Coverage (x)||Cash Flow To Total Debt (%)|
|DXC Technology Co.||N/A||1.1||1.16||24.26|
|EPAM Systems, Inc.||0.71||5.76||0||726.2|
|Infosys Limited Sponsored ADR||0||3.83||No interest exp||999|
|Accenture Plc Class A||0.04||1.29||342.4||19117.26|
|Cognizant Technology Solutions Corporation Class A||3.78||3.03||116.27||203.06|
|Luxoft Holding, Inc. Class A||0.03||2.64||765.57||21957.91|
|Best In Class||0.03||5.76||No interest exp||21957.91|
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Luxoft Holding, Inc. operates as a provider of software development services and information technology solutions to a global client base consisting of multinational corporations. The company’s services include software development and support, product engineering and testing, and technology consulting. It provides its services to six industry verticals: Financial services, Travel and aviation, Technology, Telecom, Automotive and transport and Energy. The company was founded in March 2000 and is headquartered in Zug, Switzerland.
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