It's been a great morning session for United Parcel Service investors, who saw their shares rise 1.8% to a price of $86.02 per share. At these higher prices, is the company still fairly valued? If you are thinking about investing, make sure to check the company's fundamentals before making a decision.
an Increase in Expected Earnings Improves Its Value Outlook but Priced at a Premium:
United Parcel Service, Inc., a package delivery and logistics provider, offers transportation and delivery services. The company belongs to the Industrials sector, which has an average price to earnings (P/E) ratio of 24.03 and an average price to book (P/B) ratio of 2.89. In contrast, United Parcel Service has a trailing 12 month P/E ratio of 12.8 and a P/B ratio of 4.63.
United Parcel Service has moved -32.9% over the last year compared to 20.3% for the S&P 500 — a difference of -53.2%. United Parcel Service has a 52 week high of $145.01 and a 52 week low of $84.28.
The Company's Revenues Are Declining:
| 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $74,094 | $84,628 | $97,287 | $100,338 | $90,958 | $91,070 |
| Gross Margins | 11% | 9% | 13% | 13% | 10% | 9% |
| Net Margins | 6% | 2% | 13% | 12% | 7% | 6% |
| Net Income (M) | $4,440 | $1,343 | $12,890 | $11,548 | $6,708 | $5,782 |
| Net Interest Expense (M) | $653 | $701 | $694 | $704 | $785 | $854 |
| Depreciation & Amort. (M) | $2,360 | $2,698 | $2,953 | $3,188 | $3,366 | $3,609 |
| Diluted Shares (M) | 869 | 871 | 878 | 875 | 860 | 856 |
| Earnings Per Share | $5.11 | $1.54 | $14.68 | $13.2 | $7.8 | $6.75 |
| EPS Growth | n/a | -69.86% | 853.25% | -10.08% | -40.91% | -13.46% |
| Avg. Price | $98.17 | $119.28 | $179.82 | $188.73 | $150.93 | $84.5 |
| P/E Ratio | 19.1 | 76.95 | 12.19 | 14.23 | 19.33 | 12.5 |
| Free Cash Flow (M) | $2,259 | $5,047 | $10,813 | $9,335 | $5,080 | $6,213 |
| CAPEX (M) | $6,380 | $5,412 | $4,194 | $4,769 | $5,158 | $3,909 |
| EV / EBITDA | 10.58 | 11.9 | 10.7 | 11.08 | 12.13 | 7.35 |
| Total Debt (M) | $28,311 | $27,095 | $22,945 | $21,777 | $25,346 | $22,868 |
| Net Debt / EBITDA | 2.27 | 2.04 | 0.81 | 0.99 | 1.77 | 1.39 |
| Current Ratio | 1.11 | 1.19 | 1.42 | 1.22 | 1.1 | 1.17 |
United Parcel Service has generally positive cash flows, positive EPS growth, and healthy leverage levels. However, the firm suffers from slight revenue growth and decreasing reinvestment in the business and slimmer gross margins than its peers. Finally, we note that United Parcel Service has just enough current assets to cover current liabilities, as shown by its current ratio of 1.17.
