Capitalcube gives Mitel Networks Corp. a score of 38.
Our analysis is based on comparing Mitel Networks Corp. with the following peers – ShoreTel, Inc., Microsoft Corporation, Cisco Systems, Inc. and Inventergy Global Inc (SHOR-US, MSFT-US, CSCO-US and INVT-US).
Mitel Networks Corp. has a fundamental score of 38 and has a relative valuation of UNDERVALUED.
Access our research and ratings on Mitel Networks Corp.
- Compared to peers, relative underperformance last month is down from a median performance last year.
- Mitel Networks Corporation trades at a lower Price/Book multiple (1.44) than its peer median (2.44).
- MITL-US‘s EBITDA-based price multiple implies slower growth than its peers. The market also seems to expect the company’s currently median rates of EBITDA-based return to decline.
- MITL-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.
- MITL-US‘s return on assets currently and over the past five years is around the peer median and suggest that it does not have any particular operational advantages versus peers.
- The company’s relatively low gross margin and median pre-tax margin suggest operations may be constrained on pricing versus peers.
- While MITL-US‘s revenue growth in recent years has been above the peer median, the stock’s Price/EBITDA 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 is likely overinvesting in a business with only median returns.
- MITL-US seems too levered to raise additional debt.
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Leverage & Liquidity
MITL-US would seem to have a hard time raising additional debt.
- With debt at a relatively high 41.65% of its enterprise value compared to an overall benchmark of 25% (Note: The peer median is currently 29.60%), and relatively tight interest coverage level of 1.20x, MITL-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.
- Of the 4 chosen peers for the company, only 3 of the stocks have an outstanding debt balance. Companies with no debt include SHOR-US.
MITL-US has maintained its Limited Flexibility profile from the recent year-end.
- MITL-US‘s interest coverage is downward trending and is below (but within one standard deviation of) its five-year average interest coverage of 2.04x.
- Compared to 2015, interest coverage has remained relatively stable for both the company (1.20x) and the peer median (1.20x).
- MITL-US‘s debt-EV is less than (but within one standard deviation of) its five-year average debt-EV of 45.64%.
- While its debt-EV decreased to 41.65% from 43.56% (in 2015), its peer median increased during this period to 29.60% from 24.60%.
- Relative to peers, debt-EV fell 6.91 percentage points.
Access the detailed analysis for Mitel Networks Corp.
Key Liquidity Items
|Company||Debt/Enterprise Value (%)||Current Ratio||Interest Coverage (x)||Cash Flow To Total Debt (%)|
|Cisco Systems, Inc.||29.6||3.58||18.35||43.1|
|Inventergy Global Inc||49.33||0.07||-1.96||-54.26|
|Mitel Networks Corporation||41.65||1.46||1.2||17.74|
|Best In Class||19.56||3.58||18.35||999|
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Mitel Networks Corp. is a provider of business communications and collaboration software, services, and solutions. It operates through the following segments: Enterprise, Cloud, and Mobile. The Enterprise segment includes selling and supporting business communications products and services. The Cloud segment offers sells and supports products that are deployed in a cloud environment. The Mobile segment involves in selling and supporting software-based telecommunications networking solutions. The company was founded by Terence Hedley Matthews in 1972 and is headquartered in Ottawa, Canada.
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