3PEA International, Inc. revenue jumped on 53.8% while EBITDA Margin decreased on 2.1 pp from 17.4% to 15.2%
03/11/2019 • About 3PEA International, Inc. (
$TPNL) • By InTwits
3PEA International, Inc. reported 2018 financial results today. Here are the key drivers of the company's long term financial model:
- 3PEA International, Inc. is a fast growth stock: 2018 revenue growth was 53.8%, 5 year revenue CAGR was 30.0% at 2018 ROIC 36.0%
- EBITDA Margin is quite volatile: 15.2% in 2018, 17.4% in 2017, 18.5% in 2016, 4.4% in 2015, 28.4% in 2014
- 3PEA International, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.0%. At the same time it's a lot of higher than industry average of 3.1%.
- CAPEX is quite volatile: $0m in 2018, $1m in 2017, $0m in 2016, $0m in 2015, $0m in 2014
- The company has highly profitable business model: ROIC is 36.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue jumped on 53.8%. Revenue growth showed small slowdown in 18Q4 - it was 48.8% YoY. During the last 5 years Revenue growth bottomed in 2015 at -21.2% and was accelerating since that time. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.4 pp from 1.1% to 2.5% in 2018.
Gross Margin increased on 4.7 pp from 44.0% to 48.7% in 2018. During the last 5 years Gross Margin bottomed in 2017 at 44.0%. SG&A as a % of Revenue increased on 6.8 pp from 26.6% to 33.4% in 2018.
Net Income margin decreased slightly on 0.71 pp from 11.8% to 11.0% in 2018.
Investments (CAPEX, working capital and M&A)
3PEA International, Inc.'s CAPEX/Revenue was 1.1% in 2018. CAPEX/Revenue decreased slightly on 0.61 pp from 1.7% in 2015 to 1.1% in 2018. Average CAPEX/Revenue for the last three years was 2.3%.
Return on investment
The company operates at high and attractive ROIC (36.0%) and ROE (36.6%). ROIC decreased on 8.9 pp from 44.9% to 36.0% in 2018. ROE decreased on 9.0 pp from 45.6% to 36.6% in 2018.
Leverage (Debt)
The company has no debt. Cash jumped on 104%.
Financial and operational results
FY ended 12/31/2018
3PEA International, Inc. ($TPNL) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 10.293 | 8.108 | 10.417 | 15.234 | 23.424 | 53.8% |
| Gross Profit | 5.638 | 4.088 | 5.219 | 6.700 | 11.397 | 70.1% |
| SG&A | 2.715 | 3.734 | 3.288 | 4.056 | 7.835 | 93.2% |
| EBITDA | 2.923 | 0.354 | 1.931 | 2.644 | 3.562 | 34.7% |
| Net Income | 2.610 | -2.410 | 1.401 | 1.791 | 2.588 | 44.5% |
Balance Sheet
|
|---|
| Cash | 3.887 | 1.389 | 1.632 | 2.748 | 5.615 | 104.3% |
| Short Term Debt | 1.026 | 1.090 | 0.379 | 0.000 | 0.000 | |
| Long Term Debt | 0.000 | 0.339 | 0.028 | 0.000 | 0.000 | |
Cash flow
|
|---|
| Capex | 0.141 | 0.138 | 0.110 | 0.707 | 0.257 | -63.7% |
Ratios
|
|---|
| Revenue growth | 63.2% | -21.2% | 28.5% | 46.2% | 53.8% | |
| EBITDA growth | 301.6% | -87.9% | 445.7% | 36.9% | 34.7% | |
|
|---|
| Gross Margin | 54.8% | 50.4% | 50.1% | 44.0% | 48.7% | 4.7% |
| EBITDA Margin | 28.4% | 4.4% | 18.5% | 17.4% | 15.2% | -2.1% |
| SG&A, % of revenue | 26.4% | 46.1% | 31.6% | 26.6% | 33.4% | 6.8% |
| Net Income Margin | 25.4% | -29.7% | 13.4% | 11.8% | 11.0% | -0.7% |
| CAPEX, % of revenue | 1.4% | 1.7% | 1.1% | 4.6% | 1.1% | -3.5% |
|
|---|
| ROIC | 118.8% | -0.3% | 48.2% | 44.9% | 36.0% | -8.9% |
| ROE | 187.1% | -120.4% | 68.5% | 45.6% | 36.6% | -9.0% |
| Net Debt/EBITDA | -1.0x | 0.1x | -0.6x | -1.0x | -1.6x | -0.5x |
3PEA International, Inc. ($TPNL) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 5 | 5 | 6 | 7 | | 46.1% | 59.8% | 60.5% | 48.8% |
| EBITDA | 1 | 1 | 1 | 1 | | 20.1% | 50.2% | 39.3% | 27.4% |
| Net Income | 0 | 1 | 1 | 1 | | 11.7% | 90.4% | 60.1% | 19.6% |
Balance Sheet
|
|---|
| Cash | 2 | 3 | 4 | 6 | | 51.4% | 119.0% | 124.3% | 104.3% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | | |
| Long Term Debt | 0 | 0 | 0 | 0 | | | | | |
Ratios
|
|---|
| Gross Margin | 48.0% | 48.0% | 47.4% | 50.8% | | 5.2% | 2.3% | 1.0% | 9.4% |
| EBITDA Margin | 14.2% | 17.4% | 16.3% | 13.1% | | -3.1% | -1.1% | -2.5% | -2.2% |
| Net Income Margin | 8.8% | 13.4% | 12.5% | 9.4% | | -2.7% | 2.2% | -0.0% | -2.3% |
Peers in Data Processing & Outsourced S
Below you can find 3PEA International, 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. ($SRT) | | 12.8% | 8.9% | -4.8% | 66.4% |
| |
|---|
| Median (55 companies) | | 7.1% | 7.6% | 10.1% | 7.4% |
|---|
| 3PEA International, Inc. ($TPNL) | | -21.2% | 28.5% | 46.2% | 53.8% |
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. ($GPN) | 62.7% | 63.2% | 60.4% | 51.5% | 67.5% |
| |
|---|
| Median (44 companies) | 38.4% | 39.5% | 39.2% | 38.9% | 40.9% |
|---|
| 3PEA International, Inc. ($TPNL) | 54.8% | 50.4% | 50.1% | 44.0% | 48.7% |
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. ($EVRI) | 9.6% | 14.7% | 3.0% | 20.4% | 45.2% |
| |
|---|
| Median (56 companies) | 20.4% | 21.2% | 21.3% | 21.1% | 19.4% |
|---|
| 3PEA International, Inc. ($TPNL) | 28.4% | 4.4% | 18.5% | 17.4% | 15.2% |
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 ($CATM) | 10.2% | 11.9% | 9.9% | 9.6% | 8.0% |
| |
|---|
| Median (56 companies) | 3.1% | 3.0% | 3.2% | 2.9% | 3.2% |
|---|
| 3PEA International, Inc. ($TPNL) | 1.4% | 1.7% | 1.1% | 4.6% | 1.1% |
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. ($ADP) | 23.9% | 28.9% | 37.9% | 36.6% | 37.5% |
| |
|---|
| Median (62 companies) | 13.3% | 13.1% | 11.1% | 10.6% | 10.2% |
|---|
| 3PEA International, Inc. ($TPNL) | 118.8% | -0.3% | 48.2% | 44.9% | 36.0% |
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 ($ADS) | 9.3x | 9.1x | 10.7x | 10.1x | 9.0x |
| |
|---|
| Median (54 companies) | 0.6x | 0.7x | 1.6x | 2.3x | 2.2x |
|---|
| 3PEA International, Inc. ($TPNL) | -1.0x | 0.1x | -0.6x | -1.0x | -1.6x |
