pdvWireless, Inc. – Value Analysis (NASDAQ:PDVW) : March 1, 2016

Capitalcube gives pdvWireless, Inc. a score of 13.

Our analysis is based on comparing pdvWireless, Inc. with the following peers – SBA Communications Corporation, T-Mobile US, Inc., Gogo Inc. and United States Cellular Corporation (SBAC-US, TMUS-US, GOGO-US and USM-US).

Investment Outlook

pdvWireless, Inc. has a fundamental score of 13 and has a relative valuation of OVERVALUED.

Fundamental Score

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Company Overview

  • Compared to peers, relative underperformance over the last year is in contrast with the more recent outperformance.
  • pdvWireless, Inc.’s current Price/Book of 1.52 is about median in its peer group.
  • PDVW-US‘s earnings and EBITDA are both negative which suggest that P/E or Price/EBITDA are not meaningful to make this analysis between operating advantage (ROE) and growth expectations (as suggested by P/E or P/EBITDA).
  • PDVW-US‘s relatively low net margins and poor asset turns suggest a problematic operating strategy.
  • Compared with its chosen peers, the company’s annual revenues and earnings change at a slower rate, implying a lack of strategic focus and/or lack of execution success.
  • PDVW-US‘s return on assets currently and over the past five years has trailed the peer median and suggests the company might be operationally challenged relative to its peers.
  • The company’s median gross margin and relatively low pre-tax margin suggest high operating costs versus peers.
  • PDVW-US‘s operating performance may not allow it to raise additional debt.

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Leverage & Liquidity

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

  • With debt at a relatively low 0.55% of its enterprise value compared to an overall benchmark of 25% (Note: The peer median is currently 37.40%), and relatively tight interest coverage level of -22,240.36x, PDVW-US would have a hard time raising much additional debt. Thus, the company is classified as having Limited Flexibility when it comes to raising more debt.
  • All 4 peers for the company have an outstanding debt balance.

PDVW-US has maintained its Constrained profile from the recent year-end.

  • PDVW-US‘s interest coverage is its lowest relative to the last five years and compares to a high of -2.72x in 2014.
  • Though its interest coverage decreased to -22,240.36x from -24.82x (in 2015), its peer median remained relatively stable during this period at 0.77x.
  • Interest coverage fell 22,215.55 points relative to peers.
  • PDVW-US‘s debt-EV is its highest relative to the last five years and compares to a low of 0% in 2015.
  • The increase in its debt-EV to 0.55% from 0% (in 2015) was also accompanied by an increase in its peer median during this period to 37.40% from 28.53%.
  • Relative to peers, debt-EV fell 8.32 percentage points. Unlike the peer median, it is also below the 25% leverage benchmark.

Access the detailed analysis for pdvWireless, Inc.

Key Liquidity Items

Company Debt/Enterprise Value (%) Current Ratio Interest Coverage (x) Cash Flow To Total Debt (%)
SBA Communications Corporation N/A 1.08 1.22 N/A
T-Mobile US, Inc. 54.21 1.56 1.21 25.23
Gogo Inc. 38.6 2.75 -0.86 2.03
United States Cellular Corporation 36.2 2.24 0.77 51.34
pdvWireless, Inc. 0.55 35.89 -22240.36 -2239.83
Peer Median 37.4 2.24 0.77 13.63
Best In Class 0.55 35.89 1.22 51.34

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Company Profile

pdvWireless, Inc. provides mobile workforce communications and location based solutions that increase the productivity of field-based workers and the efficiency of their dispatch and call center operations. Its patented and industry-validated technology improves team communication and field documentation across a wide array of industries including transportation, distribution, construction, hospitality, waste management and field service. The company is run by Brian McAuley, Morgan O’Brien and John Pescatore and is headquartered in Woodland Park, NJ.


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