Sierra Wireless, Inc. – Value Analysis (NASDAQ:SWIR) : January 23, 2017

Capitalcube gives Sierra Wireless, Inc. a score of 47.

Our analysis is based on comparing Sierra Wireless, Inc. with the following peers – NETGEAR, Inc., CalAmp Corp., Interphase Corporation, Cisco Systems, Inc., LM Ericsson Telefon AB Sponsored ADR Class B, Rogers Communications Inc. Class B, Inseego Corp. and Digi International Inc. (NTGR-US, CAMP-US, INPHQ-US, CSCO-US, ERIC-US, RCI-US, INSG-US and DGII-US).

Investment Outlook

Sierra Wireless, Inc. has a fundamental score of 47 and has a relative valuation of UNDERVALUED.

Fundamental Score

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Company Overview

  • Considering peers, relative underperformance over the last year and the last month suggest a lagging position.
  • Sierra Wireless Inc. trades at a lower Price/Book multiple (1.43) than its peer median (2.33).
  • SWIR-US‘s EBITDA-based price implies better than peer median growth.The market seems to expect a turnaround in the company’s current EBITDA-based return on equity.
  • SWIR-US has relatively low net profit margins while its asset efficiency is relatively high.
  • The company’s year-on-year change in revenues and earnings are better than the median among its peer group.
  • SWIR-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.
  • Compared with the peers chosen, SWIR-US has had faster revenue growth in prior years and a current Price/EBITDA ratio that suggests faster growth in the future suggesting superior growth expectations.
  • The company’s capital investment program and to-date returns suggest that the company is likely making big bets on the future.
  • SWIR-US currently does not have any debt.

Access our research and ratings on Sierra Wireless, Inc.

Leverage & Liquidity

SWIR-US currently does not have any debt.

  • We consider the company to have a Quick & Able profile as it currently does not have any debt. In comparison, the median level of debt as percent of enterprise value for its peer group is currently 12.42%.
  • Of the 8 chosen peers for the company, only 5 of the stocks have an outstanding debt balance. Companies with no debt include NTGR-US, INPHQ-US and DGII-US.

Access the detailed analysis for Sierra Wireless, Inc.

Key Liquidity Items

Company Debt/Enterprise Value (%) Current Ratio Interest Coverage (x) Cash Flow To Total Debt (%)
NETGEAR, Inc. 0 3.04 No interest exp 999
CalAmp Corp. 25.89 2.8 1.26 23.89
Interphase Corporation 0 2.08 -1227 999
Cisco Systems, Inc. 29.6 3.58 18.35 43.1
LM Ericsson Telefon AB Sponsored ADR Class B 12.42 2.02 10.24 63.56
Rogers Communications Inc. Class B 37.31 0.49 3.56 23
Inseego Corp. 37.62 1.34 -1.92 -9.71
Digi International Inc. 0 8.22 No interest exp 999
Sierra Wireless Inc. 0 1.84 80.72 999
Peer Median 12.42 2.08 10.24 63.56
Best In Class 12.42 8.22 No interest exp 999

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Company Profile

Sierra Wireless, Inc. engages in the development of device-to-cloud products and services for the Internet of Things. It offers second generation, third generation, and fourth generation embedded wireless modules, and gateways. it operates through the following segments: Original Equipment Manufacturers (OEM) Solutions, Enterprise Solutions, and Cloud and Connectivity Services. The OEM Solutions segment includes embedded cellular modules, software and tools for OEM customers who integrate cellular connectivity into their products and solutions across a broad range of industries, including automotive, transportation, energy, enterprise networking, sales and payment, mobile computing, security, industrial monitoring, field services, residential, healthcare and others. The Enterprise Solutions segment comprises of intelligent routers and gateways along with management tools and applications that enable cellular connectivity for mobile, industrial, and enterprise customers. The Cloud and Connectivity Services consists of cloud services, global cellular connectivity services, and broadband cellular services. The company was founded on May 31, 1993 and is headquartered in Richmond, Canada.


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