A strong performer from today's afternoon trading session is Sony, whose shares rose 1.8% to $26.88 per share. For those of you thinking about investing in the stock, here is a brief value analysis of the stock using the company's basic fundamental ratios.
The Market May Be Undervaluing Sony's Assets and Equity:
Sony Group Corporation designs, develops, produces, and sells electronic equipment, instruments, and devices for the consumer, professional, and industrial markets in Japan, the United States, Europe, China, the Asia-Pacific, and internationally. The company belongs to the Consumer Staples sector, which has an average price to earnings (P/E) ratio of 25.91 and an average price to book (P/B) ratio of 3.03. In contrast, Sony has a trailing 12 month P/E ratio of 20.8 and a P/B ratio of 0.02.
Sony has moved 57.8% over the last year compared to 11.9% for the S&P 500 — a difference of 45.9%. Sony has a 52 week high of $26.95 and a 52 week low of $15.86.
Generally Positive Cash Flows but Not Enough Current Assets to Cover Current Liabilities:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $8,665,687 | $8,259,885 | $8,999,360 | $9,921,513 | $10,974,373 | $13,020,768 |
| Operating Margins | 10% | 10% | 11% | 12% | 12% | 9% |
| Net Margins | 11% | 7% | 13% | 9% | 9% | 8% |
| Net Income (M) | $916,271 | $582,191 | $1,171,776 | $888,406 | $1,011,773 | $980,494 |
| Diluted Shares (M) | 1,295 | 1,262 | 1,251 | 1,357 | 1,352 | 1,330 |
| Earnings Per Share | $707.74 | $461.23 | $936.9 | $705.16 | $809.85 | $785.68 |
| EPS Growth | n/a | -34.83% | 103.13% | -24.73% | 14.85% | -2.98% |
| Free Cash Flow (M) | $946,094 | $909,984 | $837,911 | $1,233,643 | $314,691 | $1,373,213 |
| Total Debt (M) | $568,372 | $634,966 | $773,294 | $1,203,646 | $1,767,696 | $2,058,117 |
| Net Debt / EBITDA | -0.71 | -0.7 | -0.74 | -0.4 | 0.12 | 0.06 |
| Current Ratio | 0.86 | 0.91 | 0.92 | 0.63 | 0.61 | 0.66 |
Sony has generally positive cash flows, positive EPS growth, and healthy leverage levels. However, the firm suffers from weak operating margins with a stable trend and not enough current assets to cover current liabilities because its current ratio is 0.66.
