Computer Services Inc reports 25.6% Net Income growth in 2018 while 2.2 pp EBITDA Margin decline from 27.9% to 25.7%
04/04/2018 • About Computer Services Inc (
$CSVI) • By InTwits
Computer Services Inc reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts: The company has highly profitable business model: ROIC is 26.5%.
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Computer Services Inc's Revenue increased on 6.2%. Revenue growth showed slowdown in FY18Q4 - it was 3.9% YoY. During FY2014-FY2018 Revenue growth bottomed in FY2016 at 1.5% and was accelerating since that time. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.63 pp from 3.1% to 3.7% in 2018.
Net Income margin increased on 2.4 pp from 13.2% to 15.6% in FY2018. Net Income margin followed a growing trend in FY2014-FY2018.
Investments (CAPEX, working capital and M&A)
Computer Services Inc's CAPEX/Revenue was 3.6% in FY2018. Computer Services Inc's CAPEX/Revenue increased slightly on 1.0 pp from 2.6% in FY2015 to 3.6% in FY2018. Average CAPEX/Revenue for the last three years was 3.7%.
Return on investment
The company operates at high and attractive ROIC (26.5%) and ROE (21.5%). ROIC decreased on 4.2 pp from 30.7% to 26.5% in FY2018. ROE increased on 2.6 pp from 19.0% to 21.5% in FY2018. ROIC stuck to a declining trend at -1.8 pp per annum in the last 5 years. During FY2014-FY2018 ROE bottomed in FY2017 at 19.0%.
Leverage (Debt)
The company has no debt. Cash surged on 17.7%.
Valuation and dividends
The company's trades at EV/EBITDA 9.6x and P/E 16.9x.
Financial and operational results
FY ended 02/28/2018
Computer Services Inc ($CSVI) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 212.9 | 221.4 | 224.7 | 234.9 | 249.6 | 6.2% |
| EBITDA | | 60.4 | 63.1 | 65.5 | 64.0 | -2.2% |
| Net Income | 26.7 | 27.8 | 29.1 | 30.9 | 38.8 | 25.6% |
Balance Sheet
|
|---|
| Cash | 1.1 | 11.8 | 17.4 | 34.6 | 40.7 | 17.7% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | | 5.8 | 8.8 | 8.0 | 9.1 | 13.2% |
Ratios
|
|---|
| Revenue growth | 7.4% | 4.0% | 1.5% | 4.5% | 6.2% | |
| EBITDA growth | | | 4.6% | 3.7% | -2.2% | |
|
|---|
| EBITDA Margin | | 27.3% | 28.1% | 27.9% | 25.7% | -2.2% |
| Net Income Margin | 12.5% | 12.6% | 13.0% | 13.2% | 15.6% | 2.4% |
| CAPEX, % of revenue | | 2.6% | 3.9% | 3.4% | 3.6% | 0.2% |
|
|---|
| ROIC | 34.3% | 33.2% | 32.0% | 30.7% | 26.5% | -4.2% |
| ROE | 20.8% | 20.2% | 19.4% | 19.0% | 21.5% | 2.6% |
| Net Debt/EBITDA | | -0.2x | -0.3x | -0.5x | -0.6x | -0.1x |
Computer Services Inc ($CSVI) key quoterly financial indicators
| mln. $ | FY18Q1 | FY18Q2 | FY18Q3 | FY18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 65 | 61 | 61 | 63 | | 15.2% | 5.7% | 0.8% | 3.9% |
| EBITDA | 20 | 17 | 17 | 10 | | 37.2% | -2.7% | -3.4% | -35.9% |
| Net Income | 10 | 8 | 8 | 14 | | 47.0% | -7.0% | -7.1% | 77.2% |
Balance Sheet
|
|---|
| Cash | 48 | 38 | 44 | 41 | | 75.0% | 9.4% | 13.5% | 17.7% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | | |
| Long Term Debt | 0 | 0 | 0 | 0 | | | | | |
Ratios
|
|---|
| EBITDA Margin | 31.2% | 27.1% | 27.5% | 16.7% | | 5.0% | -2.3% | -1.2% | -10.3% |
| Net Income Margin | 15.4% | 12.4% | 12.7% | 21.6% | | 3.3% | -1.7% | -1.1% | 8.9% |
Peers in Data Processing & Outsourced S
Below you can find Computer Services Inc benchmarking vs. other companies in Data Processing & Outsourced S 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, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Verra Mobility Corp ($VRRM) | | | | | 167.8% |
| StoneCo Ltd ($STNE) | | | | 74.3% | 106.0% |
| PagSeguro Digital Ltd. ($PAGS) | | 107.1% | 68.7% | 121.7% | 71.8% |
| Payment Data Systems, Inc. ($PYDS) | | 7.4% | -16.0% | 20.7% | 71.7% |
| StarTek, Inc. ($SRT) | | 12.8% | 8.9% | -4.8% | 66.4% |
| |
|---|
| Median (55 companies) | | 7.1% | 7.7% | 11.8% | 7.5% |
|---|
| Computer Services Inc ($CSVI) | | 4.0% | 1.5% | 4.5% | 6.2% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Verra Mobility Corp ($VRRM) | | | | 97.4% | 97.5% |
| Everi Holdings Inc. ($EVRI) | 25.8% | 38.3% | 36.1% | 34.5% | 79.9% |
| StoneCo Ltd ($STNE) | | | 69.7% | 70.8% | 79.5% |
| Paychex, Inc. ($PAYX) | 70.9% | 70.5% | 71.0% | 70.8% | 69.9% |
| Global Payments Inc. ($GPN) | 62.7% | 63.2% | 60.4% | 51.5% | 67.5% |
| |
|---|
| Median (45 companies) | 38.8% | 39.5% | 39.3% | 39.3% | 41.0% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Visa Inc. ($V) | 64.0% | 68.9% | 55.6% | 69.2% | 65.8% |
| FleetCor Technologies, Inc. ($FLT) | 56.1% | 50.4% | 52.0% | 50.8% | 55.9% |
| StoneCo Ltd ($STNE) | | | 31.4% | 26.0% | 53.0% |
| Mastercard Incorporated ($MA) | 57.5% | 56.3% | 56.9% | 56.5% | 51.8% |
| Everi Holdings Inc. ($EVRI) | 9.6% | 14.7% | 3.0% | 20.4% | 45.2% |
| |
|---|
| Median (56 companies) | 20.5% | 21.0% | 21.2% | 20.6% | 19.2% |
|---|
| Computer Services Inc ($CSVI) | | 27.3% | 28.1% | 27.9% | 25.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Crypto Co/The ($CRCW) | 0.0% | 0.0% | | 1,216.6% | 853.5% |
| Steel Connect, Inc. ($STCN) | 0.6% | 1.5% | 1.7% | 1.1% | 75.6% |
| Everi Holdings Inc. ($EVRI) | 3.0% | 9.3% | 9.4% | 9.9% | 21.9% |
| StoneCo Ltd ($STNE) | | | 7.2% | 18.4% | 8.9% |
| Cardtronics plc ($CATM) | 10.2% | 11.9% | 9.9% | 9.6% | 8.0% |
| |
|---|
| Median (56 companies) | 3.1% | 3.0% | 3.2% | 2.9% | 3.0% |
|---|
| Computer Services Inc ($CSVI) | | 2.6% | 3.9% | 3.4% | 3.6% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| GreenSky, Inc. ($GSKY) | | | | 156.4% | 93.7% |
| Mastercard Incorporated ($MA) | 63.5% | 57.5% | 57.5% | 60.6% | 64.7% |
| Paychex, Inc. ($PAYX) | 54.5% | 58.7% | 61.9% | 63.9% | 64.5% |
| NIC Inc. ($EGOV) | 64.6% | 61.2% | 63.1% | 52.1% | 39.3% |
| Automatic Data Processing, Inc. ($ADP) | 23.9% | 28.9% | 37.9% | 36.6% | 37.5% |
| |
|---|
| Median (62 companies) | 13.3% | 12.8% | 11.1% | 10.6% | 10.2% |
|---|
| Computer Services Inc ($CSVI) | 34.3% | 33.2% | 32.0% | 30.7% | 26.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| StarTek, Inc. ($SRT) | -0.1x | | 2.2x | 2.3x | 18.4x |
| Square, Inc. ($SQ) | | | | | 13.3x |
| Steel Connect, Inc. ($STCN) | -12.5x | | | | 12.6x |
| Exela Technologies Inc ($XELAU) | | | 8.1x | | 9.7x |
| Alliance Data Systems Corporation ($ADS) | 9.3x | 9.1x | 10.7x | 10.1x | 9.0x |
| |
|---|
| Median (54 companies) | 0.5x | 0.7x | 1.6x | 2.3x | 2.2x |
|---|
| Computer Services Inc ($CSVI) | | -0.2x | -0.3x | -0.5x | -0.6x |
