Capitalcube gives Stantec, Inc. a score of 56.
Our analysis is based on comparing Stantec, Inc. with the following peers – Tetra Tech, Inc., Versar, Inc. and Willdan Group, Inc. (TTEK-US, VSRI-US and WLDN-US).
Stantec, Inc. has a fundamental score of 56 and has a relative valuation of UNDERVALUED.
Access our research and ratings on Stantec, Inc.
- Compared to peers, relative underperformance over the last year is in contrast with the more recent outperformance.
- It trades at a lower Price/Book multiple (2.14) than its peer median (2.96).
- The market expects faster earnings growth from STN-US than from its peers and also a turnaround in its current ROE.
- STN-US‘s relatively low net margins and poor asset turns suggest a problematic operating strategy.
- 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.
- Over the last five years, STN-US‘s return on assets has eroded from above median to below median among its peers suggesting declining relative operating performance.
- The company’s relatively high gross margin suggests some differentiation with pricing advantages versus peers.
- While STN-US‘s revenues growth has been around the peer median in recent years, the market seems to see faster growth ahead and gives its shares a higher than peer median P/E ratio.
- The company is likely overinvesting in a business with only median returns.
- STN-US has additional debt capacity.
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Leverage & Liquidity
STN-US has additional debt capacity.
- With debt at a reasonable 21.85% of its enterprise value compared to an overall benchmark of 25% (Note: The peer median is currently 17.29%), and a well-cushioned interest coverage level of 7.10x, STN-US has the capacity to borrow some more.
- All 3 peers for the company have an outstanding debt balance.
STN-US has maintained its relatively high liquidity profile from the recent year-end.
- STN-US‘s interest coverage has increased 1.26 points from last year’s low but is still below its five-year average interest coverage of 14.48.
- The increase in its interest coverage to 7.10x from 5.84x (in 2016) was also accompanied by an increase in its peer median during this period to 11.17x from 10.54x.
- Interest coverage rose 0.63 points relative to peers.
- STN-US‘s debt-EV is similar to last year’s high of 21.85%, which compares to a low of 7.53% in 2013.
- Compared to 2016, debt-EV has remained relatively stable for both the company (21.85%) and the peer median (17.29%).
Access the detailed analysis for Stantec, Inc.
Key Liquidity Items
|Company||Debt/Enterprise Value (%)||Current Ratio||Interest Coverage (x)||Cash Flow To Total Debt (%)|
|Tetra Tech, Inc.||12.74||1.94||15.23||46.13|
|Willdan Group, Inc.||3.82||1.46||103.07||488|
|Best In Class||3.82||1.94||103.07||488|
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Stantec, Inc. is engaged in providing professional consulting services in planning, engineering, architecture, interior design, landscape architecture, surveying, environmental sciences, project management and project economics for infrastructure & facilities projects. It supports its clients through multidiscipline service delivery throughout the project life cycle. Stantec was founded in 1954 and is headquartered in Edmonton, Canada.
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