Sierra Wireless, Inc. – Value Analysis (NASDAQ:SWIR) : May 9, 2017

Capitalcube gives Sierra Wireless, Inc. a score of 66.

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 66 and has a relative valuation of OVERVALUED.

Fundamental Score

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Company Overview

  • Considering peers, relative outperformance over the last year and the last month suggest a leading position.
  • It’s current Price/Book of 2.50 is about median in its peer group.
  • The market expects SWIR-US to grow faster than its peers and for the company to improve its current ROE.
  • SWIR-US‘s median net profit margins and relatively high asset efficiency give it some operating leverage.
  • 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 has improved from below median to about median among its peers over the last five years.
  • 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.
  • Compared with the peers chosen, SWIR-US 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 relatively low level of capital investment and below peer median returns on capital suggest that the company is in maintenance mode.
  • 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 9.79%.
  • 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 3.06 No interest exp 999
CalAmp Corp. N/A 2.7 0.14 22
Interphase Corporation 0 2.08 -1227 999
Cisco Systems, Inc. 29.54 3.67 16.53 37.14
LM Ericsson Telefon AB Sponsored ADR Class B 19.57 1.67 -0.4 -15.13
Rogers Communications Inc. Class B 36.21 0.52 3.63 23.69
Inseego Corp. 43.39 1.1 -1.85 -8.99
Digi International Inc. 0 7.97 No interest exp 999
Sierra Wireless Inc. 0 1.82 No interest exp 999
Peer Median 9.79 2.08 3.63 37.14
Best In Class 19.57 7.97 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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