Looking for a profitable fast-growing stock? Look at Exco Technologies Ltd
09.12.2015 • About Exco Technologies Ltd (
$XTC) • By InTwits
Exco Technologies Ltd is a fast-growing stock in Industrial industry. Its revenue performance, profitability and healthy financial model stands it out vs. other public companies on the market.
Growth story
Exco Technologies Ltd showed growth in the last financial year. Exco Technologies Ltd's revenue surged on 35.3% in FY2015. The growth also happened in EBITDA of 42.7% for the same period.
In the last 3 years Exco Technologies Ltd showed fast revenue growth of 27.1% from FY2012 to FY2015 annually. EBITDA surged on 21.8% from FY2012 to FY2015 annually.
Exco Technologies Ltd ($XTC) financials for the last 5 years
| mln. CAD | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Revenue | 203 | 243 | 245 | 368 | 498 |
|---|
| Revenue growth, % | | 19.7% | 0.9% | 50.5% | 35.3% |
|---|
| Gross margin, % | 25.8% | 28.8% | 29.1% | 24.3% | 23.8% |
|---|
| SG&A, % | 11.8% | 11.2% | 11.5% | 9.63% | 8.36% |
|---|
| EBITDA | 29 | 43 | 43 | 54 | 77 |
|---|
| EBITDA growth, % | | 49.2% | 0.8% | 25.6% | 42.7% |
|---|
| EBITDA margin, % | 14.1% | 17.6% | 17.6% | 14.6% | 15.4% |
|---|
| Net Income | 13 | 24 | 24 | 31 | 41 |
|---|
| Net Income margin, % | 6.55% | 10.1% | 9.66% | 8.32% | 8.18% |
|---|
| |
| CAPEX | 9 | 8 | 22 | 25 | 20 |
|---|
| CAPEX/Revenue, % | 4.41% | 3.19% | 8.81% | 6.72% | 4.01% |
|---|
| Debt | 0 | 0 | 0 | 23 | 11 |
|---|
| Cash | 15 | 31 | 26 | 31 | 35 |
|---|
| Net Debt/EBITDA | -0.5x | -0.7x | -0.6x | -0.1x | -0.3x |
|---|
| |
| ROIC, % | 14.0% | 23.2% | 21.1% | 20.4% | 24.2% |
|---|
| ROE, % | 10.6% | 17.8% | 15.4% | 16.7% | 18.2% |
|---|
Profitability and return on investment
Margin expansion supported EBITDA growth. The company's EBITDA margin increased on 0.800 pp from 14.6% to 15.4% in FY2015. If we look for the longer period EBITDA margin dropped on 2.20 pp from 17.6% in FY2012 to 15.4% in FY2015.
Exco Technologies Ltd shows attractive ROIC at 24.2% for the last 12 months which assumes stable development model. Three years ago it was a bit lower at 23.2%. Average ROIC for the last three years was 21.9%.
Exco Technologies Ltd showed small Net Income margin decline of 0.100 pp from 8.30% to 8.20% in FY2015. In the longer period Exco Technologies Ltd showed big decline in Net Income margin of 1.90 pp from 10.1% in FY2012 to 8.20% in FY2015.
Exco Technologies Ltd operates at ROE of 18.2%. Average ROE for the last three years was 16.8%.
Capital expenditures (CAPEX)
The company's CAPEX/Revenue was 4.01% in FY2015. CAPEX/Revenue surged on 0.823 pp from 3.19% in FY2012 to 4.01% in FY2015. Average CAPEX/Revenue for the last three years was 6.51%.
Leverage (Debt)
Having such a fast growth profile Exco Technologies Ltd keeps negative net debt at -0.3x Net Debt/EBITDA. If we look for the longer period leverage surged on 0.42x from -0.73x in FY2012 to -0.32x in FY2015.
Valuation vs. comparable companies
The company trades at 8.7x EV/EBITDA which is 69.5% lower than 28.4x Industrial industry avearge calculated based on 168 companies. The market closed today at 17.0x P/E for Exco Technologies Ltd which is 22.1% lower than 21.7x Industrial peer group avearge calculated on the basis of 40 companies.
For capital intensive compnanies it's worth taking a look at EV/(EBITDA-CAPEX) multiple. The market closed today at 11.7x EV/(EBITDA-CAPEX) for Exco Technologies Ltd which is 1,310% higher than 0.8x Industrial peer group avearge calculated on the basis of 41 companies.
Peers in Industrial
Below you can find Exco Technologies Ltd benchmarking vs. other companies in Industrial 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 |
|---|
| Electrovaya Inc ($EFL) | | -4.0% | -71.2% | 160.5% | 123.8% |
| Enterprise Group Inc ($E) | 14.5% | 3.5% | 88.3% | 128.5% | |
| Carmanah Technologies Corp ($CMH) | 5.8% | -26.4% | -2.0% | 68.8% | |
| Lumenpulse Inc ($LMP) | | 56.7% | 33.9% | 47.0% | 61.8% |
| WSP Global Inc ($WSP) | 12.3% | 92.9% | 60.3% | 44.0% | |
| |
|---|
| Median (92 companies) | 12.4% | 10.4% | 5.3% | 9.1% | 23.9% |
|---|
| Exco Technologies Ltd ($XTC) | | 19.7% | 0.9% | 50.5% | 35.3% |
Top companies by Gross margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| WSP Global Inc ($WSP) | 81.1% | 81.1% | 83.2% | 81.0% | |
| Pure Technologies Ltd ($PUR) | 75.7% | 77.9% | 78.0% | 77.5% | |
| Alarmforce Industries Inc ($AF) | 76.4% | 75.0% | 76.5% | 72.2% | |
| Epicore BioNetworks Inc ($EBN) | 59.0% | 60.8% | 63.2% | 64.1% | 58.1% |
| FLYHT Aerospace Solutions Ltd ($FLY) | 54.0% | 57.2% | 59.2% | 62.9% | |
| |
|---|
| Median (88 companies) | 23.2% | 23.0% | 23.3% | 22.6% | 26.5% |
|---|
| Exco Technologies Ltd ($XTC) | 25.8% | 28.8% | 29.1% | 24.3% | 23.8% |
Top companies by EBITDA margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Canadian National Railway Co ($CNR) | 46.3% | 46.5% | 45.9% | 46.8% | |
| Canadian Pacific Railway Ltd ($CP) | 28.1% | 26.1% | 32.4% | 43.7% | |
| Vitreous Glass Inc ($VCI) | 29.0% | 31.4% | 32.2% | 37.8% | |
| Questor Technology Inc ($QST) | 25.1% | 25.7% | 34.9% | 34.1% | |
| Progressive Waste Solutions Ltd ($BIN) | 32.2% | 30.7% | 33.1% | 34.0% | |
| |
|---|
| Median (85 companies) | 8.1% | 9.2% | 8.3% | 7.2% | 10.8% |
|---|
| Exco Technologies Ltd ($XTC) | 14.1% | 17.6% | 17.6% | 14.6% | 15.4% |
Top companies by CAPEX/Revenue, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Cargojet Inc ($CJT.A) | 6.8% | 7.0% | 6.3% | 54.1% | |
| Newalta Corp ($NAL) | 17.2% | 21.7% | 34.5% | 35.1% | |
| Enterprise Group Inc ($E) | 3.6% | 17.4% | 27.2% | 32.7% | |
| ENTREC Corp ($ENT) | | 35.0% | 26.7% | 29.5% | |
| Horizon North Logistics Inc ($HNL) | 25.1% | 26.5% | 16.3% | 24.1% | |
| |
|---|
| Median (92 companies) | 2.4% | 3.0% | 3.5% | 3.1% | 2.6% |
|---|
| Exco Technologies Ltd ($XTC) | 4.4% | 3.2% | 8.8% | 6.7% | 4.0% |
Top companies by ROIC, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Vitreous Glass Inc ($VCI) | 26.1% | 30.5% | 32.3% | 48.3% | |
| Photon Control Inc ($PHO) | 10.1% | 21.0% | 44.4% | 38.0% | |
| SNC-Lavalin Group Inc ($SNC) | 14.6% | 10.7% | 4.0% | 35.2% | |
| Alarmforce Industries Inc ($AF) | 18.3% | 5.3% | 24.0% | 33.9% | |
| Epicore BioNetworks Inc ($EBN) | 24.8% | 28.1% | 16.1% | 32.5% | 26.3% |
| |
|---|
| Median (93 companies) | 8.9% | 9.3% | 8.5% | 8.5% | 8.5% |
|---|
| Exco Technologies Ltd ($XTC) | 14.0% | 23.2% | 21.1% | 20.4% | 24.2% |
Top companies by Net Debt / EBITDA
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Sigma Industries Inc ($SSG) | | 4.4x | 11.3x | 225.9x | 2.9x |
| H2O Innovation Inc ($HEO) | | | 4.2x | 73.2x | 1.6x |
| Grand Power Logistics Group Inc ($GPW) | | 47.8x | | 53.1x | |
| Cargojet Inc ($CJT.A) | 1.8x | 1.5x | 1.5x | 31.5x | |
| IBI Group Inc ($IBG) | 4.2x | 6.5x | | 8.3x | |
| |
|---|
| Median (72 companies) | 1.1x | 1.5x | 1.5x | 1.3x | -0.2x |
|---|
| Exco Technologies Ltd ($XTC) | -0.5x | -0.7x | -0.6x | -0.1x | -0.3x |
