Tecnoglass, Inc. – Value Analysis (NASDAQ:TGLS) : December 27, 2016

Capitalcube gives Tecnoglass, Inc. a score of 57.

Our analysis is based on comparing Tecnoglass, Inc. with the following peers – Ply Gem Holdings, Inc., PGT, 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 57 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.
  • Tecnoglass Inc.’s current Price/Book of 3.68 is about median in its peer group.
  • TGLS-US‘s operating performance is relatively good compared to its peers. The market currently does not expect high earnings growth relative to its peers but seems to expect the company to maintain its relatively high rates of return.
  • TGLS-US‘s relatively high profit margins are burdened by relative asset inefficiency.
  • 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.
  • TGLS-US‘s return on assets has improved from below median to about median among its peers over the last five years.
  • The company’s relatively high gross and pre-tax margins suggest a differentiated product portfolio and tight control on operating costs relative to peers.
  • The company is likely overinvesting in a business with only median returns.
  • TGLS-US seems to be constrained by the current level of debt.

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Leverage & Liquidity

TGLS-US is debt-constrained.

  • With debt at a relatively high 37.15% of its enterprise value compared to an overall benchmark of 25% (Note: The peer median is currently 32.72%), and interest coverage level of 3.41x, TGLS-US seems debt-constrained.
  • All 5 peers for the company have an outstanding debt balance.

TGLS-US has moved to a Some Capacity from a relatively high liquidity profile at the recent year-end.

  • TGLS-US‘s interest coverage is less than (but within one standard deviation of) its five-year average interest coverage of 252.30x.
  • Compared to 2015, interest coverage has remained relatively stable for both the company (3.41x) and the peer median (4.28x).
  • Interest coverage fell 0.54 points relative to peers.
  • 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 37.15% from 28.38% (in 2015) was also accompanied by an increase in its peer median during this period to 32.72% from 28.20%.
  • Relative to peers, debt-EV rose 4.25 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. 52.31 2.23 2.31 17.44
PGT, Inc. 33.4 3.72 3.06 19.48
Masonite International Corp. 20.53 2.58 5.14 44.67
PPG Industries, Inc. 14.3 1.44 16.38 33.06
Huttig Building Products, Inc. 32.05 2.11 10.18 43.75
Tecnoglass Inc. 37.15 1.31 3.41 16.39
Peer Median 32.72 2.17 4.28 26.27
Best In Class 14.3 3.72 16.38 44.67

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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. It operates under the Alutions by TG and Alutions trademarks. The company was founded on September 21, 2011 and is headquartered in Barranquilla, Colombia.

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