Tecnoglass, Inc. – Value Analysis (NASDAQ:TGLS) : August 12, 2017

Capitalcube gives Tecnoglass, Inc. a score of 56.

Our analysis is based on comparing Tecnoglass, Inc. with the following peers – Ply Gem Holdings, Inc., PGT Innovations, Inc., Masonite International Corp., PPG Industries, Inc. and Huttig Building Products, Inc. (PGEM-US, PGTI-US, DOOR-US, PPG-US and HBP-US).

Investment Outlook

Tecnoglass, Inc. has a fundamental score of 56 and has a relative valuation of UNDERVALUED.

Fundamental Score

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Company Overview

  • From a peer analysis angle, relative underperformance over the last year has improved more recently.
  • It trades at a lower Price/Book multiple (2.24) than its peer median (3.45).
  • The market expects TGLS-US to grow faster than its peers and for the company to improve its current ROE.
  • TGLS-US‘s relatively low net margins and poor asset turns suggest a problematic operating strategy.
  • The company’s year-on-year change in revenues and earnings are better than the median among its peer group.
  • TGLS-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 relatively high gross and pre-tax margins suggest a differentiated product portfolio and tight control on operating costs relative to peers.
  • Compared with the peers chosen, TGLS-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 capital investment program and to-date returns suggest that the company is likely making big bets on the future.
  • TGLS-US seems to be constrained by the current level of debt.

Access our research and ratings on Tecnoglass, Inc.

Leverage & Liquidity

TGLS-US is debt-constrained.

  • With debt at a relatively high 45.97% of its enterprise value compared to an overall benchmark of 25% (Note: The peer median is currently 33.28%), and interest coverage level of 2.33x, TGLS-US seems debt-constrained.
  • All 5 peers for the company have an outstanding debt balance.

TGLS-US has maintained its relatively high leverage profile from the recent year-end.

  • TGLS-US‘s interest coverage is its lowest relative to the last five years and compares to a high of 999x in 2012.
  • Compared to 2016, interest coverage has remained relatively stable for both the company (2.33x) and the peer median (4.00x).
  • TGLS-US‘s debt-EV is its highest relative to the last five years and compares to a low of 28.09% in 2013.
  • The increase in its debt-EV to 45.97% from 34.56% (in 2016) was also accompanied by an increase in its peer median during this period to 33.28% from 28.41%.
  • Relative to peers, debt-EV rose 6.53 percentage points.

Access the detailed analysis for Tecnoglass, Inc.

Key Liquidity Items

Company Debt/Enterprise Value (%) Current Ratio Interest Coverage (x) Cash Flow To Total Debt (%)
Ply Gem Holdings, Inc. 40.89 1.79 2.51 19.57
PGT Innovations, Inc. 29.91 4.49 2.92 21
Masonite International Corp. 19.96 2.64 5.29 44.13
PPG Industries, Inc. 14.75 1.61 15.62 48.68
Huttig Building Products, Inc. 36.66 2.53 5.08 13.92
Tecnoglass Inc. 45.97 2.12 2.33 16.4
Peer Median 33.28 2.33 4 20.28
Best In Class 14.75 4.49 15.62 48.68

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Company Profile

Tecnoglass, Inc. operates as a holding company, which engages in the design, manufacture, and trade of architectural glass. Its products include the following types of glass: laminated, thermo-laminated, tempered, silk-screened, curved, and digital print. It also distributes floating facades, bathroom dividers, automatic doors, and hurricane-proof and commercial display windows. The company operates under the Alutions by TG and Alutions trademarks. Tecnoglass was founded on September 21, 2011 and is headquartered in Barranquilla, Colombia.

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