Capitalcube gives Service Stream Ltd. a score of 84.
Our analysis is based on comparing Service Stream Ltd. with the following peers – VIA Technologies, Inc., Guangdong Yueyun Transportation Co. Ltd. Class H and CWT Limited (2388-TW, 3399-HK and C14-SG).
Service Stream Ltd. has a fundamental score of 84 and has a relative valuation of OVERVALUED.
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- With respect to peers, relative outperformance over the last year is in contrast to the more recent underperformance.
- It currently trades at a Price/Book ratio of (2.59).
- The market expects SSM-AU to grow faster than its peers and for the company to improve its current ROE.
- SSM-AU has a successful operating model with relatively high net profit margins and asset turns.
- The company’s year-on-year change in revenues and earnings are better than the median among its peer group.
- Over the last five years, SSM-AU‘s return on assets has improved from below median to better than the median among its peers, suggesting that the company has improved its relative operations markedly.
- The company’s relatively high pre-tax margin suggests tight control on operating costs versus peers.
- Compared with the peers chosen, SSM-AU has had faster revenue growth in prior years and a current P/E ratio that suggests faster growth in the future suggesting superior growth expectations.
- The company’s level of capital investment suggests it might be under-investing in a business with above median returns.
- SSM-AU has the financial and operating capacity to borrow quickly.
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Leverage & Liquidity
SSM-AU has the financial and operating capacity to borrow quickly.
- With debt at a relatively low 0.23% of its enterprise value compared to an overall benchmark of 25% (Note: The peer median is currently 43.84%), and a well-cushioned interest coverage level of 53.69x, SSM-AU can probably borrow quickly. We classify the company as Quick & Able in terms of its capacity to raise additional debt.
- All 3 peers for the company have an outstanding debt balance.
SSM-AU has maintained its Quick & Able profile from the prior year-end.
- SSM-AU‘s interest coverage has declined 945.31 points from last year’s high and is now below its four-year average interest coverage of 252.18.
- While its interest coverage decreased to 53.69x from 999x (in 2016), its peer median increased during this period to 5.43x from 1.68x.
- Interest coverage fell 949.06 points relative to peers.
- SSM-AU‘s debt-EV is similar to last year’s low of 0% and remains below the 2014 high of 71.34%.
- Though its debt-EV has remained relatively stable at 0.23% compared to 2016, its peer median has decreased to 43.84% from 57.31% during this period.
- Relative to peers, debt-EV rose 13.70 percentage points. Unlike the peer median, it is also below the 25% leverage benchmark.
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Key Liquidity Items
|Company||Debt/Enterprise Value (%)||Current Ratio||Interest Coverage (x)||Cash Flow To Total Debt (%)|
|VIA Technologies, Inc.||52.68||1.17||-27.11||9.71|
|Guangdong Yueyun Transportation Co. Ltd. Class H||35.01||1.26||8.04||60.7|
|Service Stream Limited||0.23||1.62||53.69||9265.35|
|Best In Class||0.23||1.62||53.69||9265.35|
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Service Stream Ltd. engages in the provision of telecommunications and network services. It operates through the following segments: Fixed Communications; Mobile Communications; and Energy & Water. The Fixed Communications segment designs, installs, and maintains telecommunications network infrastructure. The Mobile Communications segment constructs and manages wireless and fixed-line telecommunications, signaling, and power. The Energy & Water segment offers metering and energy services to electricity, gas, and water networks. The company was founded by Adrian Field and Russell Andrew Small in January 2004 and is headquartered in Melbourne, Australia.
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