Capitalcube gives Luxoft Holding, Inc. a score of 72.
Our analysis is based on comparing Luxoft Holding, Inc. with the following peers – Computer Sciences Corporation, EPAM Systems, Inc., Infosys Limited Sponsored ADR, Accenture Plc and Cognizant Technology Solutions Corporation Class A (CSC-US, EPAM-US, INFY-US, ACN-US and CTSH-US).
Luxoft Holding, Inc. has a fundamental score of 72 and has a relative valuation of NEUTRAL.
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- Compared to peers, relative underperformance over the last year is in contrast with the more recent outperformance.
- Luxoft Holding, Inc. Class A’s current Price/Book of 3.45 is about median in its peer group.
- We classify LXFT-US as Harvesting because of the market’s relatively low growth expectations despite its relatively high returns.
- LXFT-US‘s median net profit margins and relatively high asset efficiency give it some operating leverage.
- Change in the company’s annual revenues seems to be coming at the expense of earnings.
- 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 margins are around the peer medians and do not suggest any benefit from a pricing or an operating cost advantage versus peers.
- While LXFT-US‘s revenue growth in recent years has been above the peer median, the stock’s P/E ratio is less than the peer median suggesting that the company’s earnings may be peaking and the market expects a decline in its growth expectations.
- 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 0.02% of its enterprise value compared to an overall benchmark of 25% (Note: The peer median is currently 1.32%), and a well-cushioned interest coverage level of 817.04x, 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 recent year-end.
- LXFT-US‘s interest coverage has declined 181.96 points from last year’s high but remains above its five-year average interest coverage of 248.14.
- The decrease in its interest coverage to 817.04x from 999x (in 2016) was also accompanied by a decrease in its peer median during this period to 288.98x from 303.24x.
- Interest coverage fell 167.69 points relative to peers.
- LXFT-US‘s debt-EV is similar to last year’s low of 0.02%, which compares to the 2014 high of 1.82%.
- Compared to 2016, debt-EV has remained relatively stable for both the company (0.02%) and the peer median (1.32%).
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 (%)|
|Computer Sciences Corporation||34.35||1.23||2.69||37.06|
|EPAM Systems, Inc.||1.32||6.23||0||363.05|
|Infosys Limited Sponsored ADR||N/A||3.54||No interest exp||999|
|Cognizant Technology Solutions Corporation Class A||2.91||3.66||123.57||212.61|
|Luxoft Holding, Inc. Class A||0.03||3.32||817.04||12139.21|
|Best In Class||0.03||6.23||No interest exp||15600.1|
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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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