Looking for a profitable fast-growing stock? Look at Galasys
07 Jul 2016 • About Galasys (
$GLS) • By InTwits
Galasys is a growth stock in Software & Computer Services industry. It showed noticeble revenue performance in the last years among with attractive profitability and financial model.
Growth story
Galasys showed growth in the last financial year. The company's revenue surged on 33.0% in FY2015. In addition to revenue Galasys also keeps delivering EBITDA growth. It was 16.4% in FY2015
If we look for the longer period the company showed fast revenue growth of 87.7% from 2012 to 2015 annually. EBITDA surged on 62.3% from 2012 to 2015 annually.
Galasys ($GLS) financials for the last 5 years
mln. MYR | 2011 | 2012 | 2013 | 2014 | 2015 |
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Revenue | 7 | 8 | 9 | 39 | 51 |
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Revenue growth, % | | 14.3% | 20.9% | 311.1% | 33.0% |
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Gross margin, % | 61.7% | 63.2% | 69.0% | 50.5% | 52.6% |
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SG&A, % | | | | 19.8% | 30.1% |
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EBITDA | 3 | 3 | 8 | 13 | 15 |
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EBITDA growth, % | | 4.8% | 129.5% | 60.1% | 16.4% |
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EBITDA margin, % | 48.0% | 44.0% | 83.6% | 32.6% | 28.5% |
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Net Income | 3 | 3 | 7 | 9 | 7 |
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Net Income margin, % | 44.2% | 38.9% | 71.9% | 24.3% | 13.7% |
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|
CAPEX | 0 | 0 | 0 | 0 | 0 |
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CAPEX/Revenue, % | 0.883% | 0.371% | 0.372% | 1.05% | 0.328% |
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Debt | 0 | 0 | 0 | 1 | 1 |
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Cash | 1 | 0 | 2 | 12 | 17 |
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Net Debt/EBITDA | -0.1x | 0.0x | -0.2x | -0.9x | -1.1x |
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|
ROIC, % | | 58.7% | 60.9% | 40.8% | 22.2% |
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ROE, % | | 61.2% | 59.0% | 34.2% | 13.0% |
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Profitability and return on investment
Despite revenue growth EBITDA margin declined slightly from 32.6% in FY2014 to 28.5% in FY2015. In the last 3 years EBITDA margin dropped on 15.5 pp from 44% in 2012 to 28.5% in 2015.
We call Galasys an attractive growth stock as together with the growth it delivers high ROIC at 22.2%. Three years ago it was considerably higher at 58.7%. For the last three years the average ROIC was 41.3%.
The company showed big decline in Net Income margin of 10.6 pp from 24.3% to 13.7% in 2015. If we look for the longer period Net Income margin dropped on 25.2 pp from 38.9% in 2012 to 13.7% in 2015.
Galasys operates at ROE of 13.0%. It's average ROE for the last three years was 35.4%.
Capital expenditures (CAPEX)
In FY2015 Galasys had CAPEX/Revenue of 0.328%. Galasys's CAPEX/Revenue dropped on 0.0435 pp from 0.371% in 2012 to 0.328% in 2015. Average CAPEX/Revenue for the last three years was 0.583%.
Leverage (Debt)
Having such a fast growth profile the company keeps negative net debt at -1.1x Net Debt/EBITDA. If we look for the longer period leverage dropped on 1.13x from 0.02x in 2012 to -1.11x in 2015.
Valuation vs. comparable companies
The company trades at 0.0x EV/EBITDA which is 99.7% lower than 13.9x Software & Computer Services industry avearge calculated based on 126 companies. At the end of trading day today Galasys traded at 2.4x P/E which is 90.3% lower than 24.9x Software & Computer Services peer group avearge calculated on the basis of 12 companies.
Peers in Software & Computer Services
Below you can find Galasys benchmarking vs. other companies in Software & Computer Services industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
---|
Top 5 |
---|
Coms ($COMS) | | | 46.8% | 763.3% | 110.4% |
Centralnic Group ($CNIC) | | 15.9% | 4.0% | 98.9% | 71.3% |
Proactis Hldgs ($PHD) | | 20.4% | 7.0% | 26.2% | 69.6% |
Progility ($PGY) | | 4.6% | | | 51.0% |
Nasstar ($NASA) | | 5.9% | | | 23.0% |
|
---|
Median (40 companies) | | 7.2% | 6.1% | 0.6% | 2.0% |
---|
Galasys ($GLS) | | 14.3% | 20.9% | 311.1% | 33.0% |
Top companies by Gross margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
---|
Top 5 |
---|
Lombard Risk Management ($LRM) | | 99.0% | 98.8% | 99.2% | 98.6% |
Phoenix It Group ($PNX) | 97.1% | 97.0% | 97.2% | 97.6% | 97.9% |
Wandisco ($WAND) | 92.2% | 91.8% | 80.3% | 80.7% | 93.2% |
Netcall ($NET) | 86.9% | 88.2% | 89.7% | 91.0% | 90.9% |
Eleco ($ELCO) | 70.3% | 86.8% | 86.6% | 87.8% | 88.9% |
|
---|
Median (33 companies) | 61.0% | 60.0% | 62.0% | 58.0% | 60.2% |
---|
Galasys ($GLS) | 61.7% | 63.2% | 69.0% | 50.5% | 52.6% |
Top companies by EBITDA margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
---|
Top 5 |
---|
Mail.Ru Group Ltd ($61HE) | 39.9% | 43.1% | 47.4% | 50.5% | 34.6% |
Omg ($OMG) | 7.1% | 15.7% | 6.0% | 14.7% | 28.4% |
Centralnic Group ($CNIC) | 32.9% | 38.7% | 31.1% | 24.8% | 28.3% |
Microgen ($MCGN) | 26.8% | 31.5% | 32.8% | 24.5% | 26.8% |
Proactis Hldgs ($PHD) | 1.7% | 13.3% | 18.3% | 22.8% | 26.4% |
|
---|
Median (40 companies) | 14.2% | 13.2% | 11.8% | 9.8% | 10.6% |
---|
Galasys ($GLS) | 48.0% | 44.0% | 83.6% | 32.6% | 28.5% |
Top companies by CAPEX/Revenue, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
---|
Top 5 |
---|
Rapidcloud Intl ($RCI) | 0.7% | 1.0% | 23.1% | 11.6% | 19.6% |
Coms ($COMS) | | 0.5% | 0.9% | 3.4% | 7.5% |
Csf Group ($CSFG) | 15.4% | 1.5% | 4.0% | 2.4% | 7.1% |
Nasstar ($NASA) | 7.3% | 17.9% | | 2.1% | 5.2% |
Unisys Corp ($USY) | 2.1% | 2.1% | 2.5% | 4.1% | 5.0% |
|
---|
Median (40 companies) | 1.4% | 1.5% | 1.6% | 1.9% | 1.1% |
---|
Galasys ($GLS) | 0.9% | 0.4% | 0.4% | 1.0% | 0.3% |
Top companies by ROIC, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
---|
Top 5 |
---|
Triad Group ($TRD) | | 4.1% | -3.8% | 24.5% | 61.5% |
International Bus Mach Corp ($IBM) | 36.2% | 36.1% | 31.0% | 28.1% | 25.7% |
Instem ($INS) | 30.3% | 20.6% | 14.7% | 10.9% | 20.4% |
Kalibrate Technologies ($KLBT) | | 12.5% | 40.2% | 29.2% | 18.8% |
Centralnic Group ($CNIC) | 121.9% | 127.8% | 24.5% | 16.4% | 17.1% |
|
---|
Median (40 companies) | 12.9% | 10.5% | 10.8% | 8.8% | 3.7% |
---|
Galasys ($GLS) | | 58.7% | 60.9% | 40.8% | 22.2% |
Top companies by Net Debt / EBITDA
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
---|
Top 5 |
---|
Progility ($PGY) | 1.0x | 2.0x | | 1.8x | 12.8x |
Parity Group ($PTY) | 6.9x | 4.7x | | 4.9x | 5.1x |
Nasstar ($NASA) | -2.3x | -5.3x | | 0.0x | 1.9x |
Phoenix It Group ($PNX) | 1.4x | 4.3x | | | 1.9x |
International Bus Mach Corp ($IBM) | 0.8x | 0.9x | 1.2x | 1.4x | 1.7x |
|
---|
Median (30 companies) | -0.7x | -0.5x | -0.4x | -0.3x | -0.5x |
---|
Galasys ($GLS) | -0.1x | 0.0x | -0.2x | -0.9x | -1.1x |