Today we're going to take a closer look at large-cap Finance company Morningstar, whose shares are currently trading at $248.44. We've been asking ourselves whether the company is under or over valued at today's prices... let's perform a brief value analysis to find out!
Morningstar's P/B and P/E Ratios Are Higher Than Average:
Morningstar, Inc. provides independent investment insights in the United States, Canada, Asia, Australia, Europe, the United Kingdom, and internationally. The company belongs to the Finance sector, which has an average price to earnings (P/E) ratio of 14.34 and an average price to book (P/B) ratio of 1.57. In contrast, Morningstar has a trailing 12 month P/E ratio of 460.1 and a P/B ratio of 8.58.
Morningstar's PEG ratio is 3.6, which shows that the stock is probably overvalued in terms of its estimated growth. For reference, a PEG ratio near or below 1 is a potential signal that a company is undervalued.
Shareholders Are Confronted With a Declining EPS Growth Trend:
| 2018-03-01 | 2019-03-01 | 2020-03-02 | 2021-02-26 | 2022-02-25 | 2023-02-24 | |
|---|---|---|---|---|---|---|
| Revenue (MM) | $912 | $1,020 | $1,179 | $1,390 | $1,699 | $1,871 |
| Interest Income (MM) | -$4 | -$2 | -$9 | -$10 | -$9 | -$28 |
| Operating Margins | 19% | 21% | 16% | 15% | 15% | 9% |
| Net Margins | 15.0% | 18.0% | 13.0% | 16.0% | 11.0% | 4.0% |
| Net Income (MM) | $137 | $183 | $152 | $224 | $193 | $70 |
| Depreciation & Amort. (MM) | -$91 | -$97 | -$118 | -$140 | -$151 | -$167 |
| Earnings Per Share | $3.18 | $4.26 | $3.52 | $5.18 | $4.45 | $1.64 |
| EPS Growth | n/a | 33.96% | -17.37% | 47.16% | -14.09% | -63.15% |
| Diluted Shares (MM) | 43 | 43 | 43 | 43 | 43 | 43 |
| Free Cash Flow (MM) | $317 | $380 | $414 | $461 | $552 | $427 |
| Capital Expenditures (MM) | -$67 | -$66 | -$80 | -$77 | -$102 | -$130 |
| Net Current Assets (MM) | -$71 | $82 | -$684 | -$695 | -$559 | -$1,457 |
| Long Term Debt (MM) | $180 | $70 | $502 | $449 | $359 | $1,078 |
| Net Debt / EBITDA | -0.66 | -1.04 | 0.47 | -0.04 | -0.46 | 2.08 |
Morningstar has weak revenue growth and a flat capital expenditure trend, irregular cash flows, and significant leverage. We also note that the company has average operating margins with a negative growth trend working in its favor. However, the firm has declining EPS growth.
