Everi Holdings Inc. revenue dropped on 51.8% while EBITDA Margin jumped on 24.8 pp from 20.4% to 45.2%
03/12/2019 • About Everi Holdings Inc. (
$EVRI) • By InTwits
Everi Holdings Inc. reported 2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Everi Holdings Inc. is a company in decline: 2018 revenue growth was -51.8%, 5 years revenue CAGR was -4.2%
- EBITDA Margin is quite volatile: 45.2% in 2018, 20.4% in 2017, 3.0% in 2016, 14.7% in 2015, 9.6% in 2014
- Everi Holdings Inc. has high CAPEX intensity: 5 year average CAPEX/Revenue was 10.7%. At the same time it's in pair with industry average of 3.6%
- CAPEX is quite volatile: $103m in 2018, $96m in 2017, $81m in 2016, $77m in 2015, $18m in 2014
- The company has business model with low profitability: ROIC is 7.9%
- It operates with high leverage: Net Debt/EBITDA is 4.1x while industry average is 2.6x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Everi Holdings Inc.'s Revenue dropped on 51.8%. Annual revenue decline showed slowdown in 18Q4 - revenue dropped on 51.8%. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin surged on 24.8 pp from 20.4% to 45.2% in 2018.
Gross Margin jumped on 45.4 pp from 34.5% to 79.9% in 2018.
Net Income margin increased on 8.0 pp from -5.3% to 2.6% in 2018. During the last 5 years Net Income margin bottomed in 2016 at -29.0% and was growing since that time.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 21.9% in 2018. CAPEX/Revenue jumped on 12.6 pp from 9.3% in 2015 to 21.9% in 2018. Average CAPEX/Revenue for the last three years was 13.7%. CAPEX as a % of Revenue followed a growing trend at 3.8 pp per annum in the last 5 years.
Leverage (Debt)
Debt level is 4.1x Net Debt / EBITDA and 5.5x Debt / EBITDA. Net Debt / EBITDA dropped on 1.2x from 5.2x to 4.1x in 2018. Debt showed almost no change in 2018 while cash surged on 131%.
Everi Holdings Inc. has no short term refinancing risk: cash is higher than short term debt (3,628.4%).
Valuation and dividends
Everi Holdings Inc.'s trades at EV/EBITDA 7.2x and P/E 53.2x.
Management team
The company's CEO is Michael D Rumbolz "Mike". Michael D Rumbolz "Mike" is a founder and has 3 years tenure with the company. Randy L Taylor is a the company's CFO. Randy L Taylor has spent 4 years at the company.
Financial and operational results
FY ended 12/31/2018
Everi Holdings Inc. ($EVRI) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 593.1 | 827.0 | 859.5 | 974.9 | 469.5 | -51.8% |
| Gross Profit | 153.0 | 316.6 | 310.4 | 336.4 | 375.1 | 11.5% |
| EBITDA | 56.7 | 121.3 | 26.1 | 198.6 | 212.3 | 6.9% |
| Net Income | 12.1 | -105.0 | -249.5 | -51.9 | 12.4 | |
Balance Sheet
|
|---|
| Cash | 89.1 | 102.0 | 119.1 | 128.6 | 297.5 | 131.4% |
| Short Term Debt | 10.0 | 10.0 | 10.0 | 8.2 | 8.2 | 0.0% |
| Long Term Debt | 1,178.8 | 1,129.9 | 1,111.9 | 1,159.6 | 1,155.0 | -0.4% |
Cash flow
|
|---|
| Capex | 18.0 | 77.0 | 80.7 | 96.5 | 103.0 | 6.8% |
Ratios
|
|---|
| Revenue growth | 1.8% | 39.4% | 3.9% | 13.4% | -51.8% | |
| EBITDA growth | -14.2% | 113.8% | -78.5% | 661.6% | 6.9% | |
|
|---|
| Gross Margin | 25.8% | 38.3% | 36.1% | 34.5% | 79.9% | 45.4% |
| EBITDA Margin | 9.6% | 14.7% | 3.0% | 20.4% | 45.2% | 24.8% |
| Net Income Margin | 2.0% | -12.7% | -29.0% | -5.3% | 2.6% | 8.0% |
| CAPEX, % of revenue | 3.0% | 9.3% | 9.4% | 9.9% | 21.9% | 12.0% |
|
|---|
| ROIC | 3.7% | -0.7% | -9.9% | 7.6% | 7.9% | 0.3% |
| ROE | 5.4% | -56.9% | | | | |
| Net Debt/EBITDA | 19.4x | 8.6x | 38.5x | 5.2x | 4.1x | -1.2x |
Everi Holdings Inc. ($EVRI) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 111 | 119 | 120 | 120 | | -53.3% | -51.0% | -51.3% | -51.8% |
| EBITDA | 54 | 53 | 55 | 51 | | 5.6% | 5.4% | 10.6% | 5.9% |
| Net Income | 5 | 1 | 2 | 4 | | | | | |
Balance Sheet
|
|---|
| Cash | 133 | 110 | 129 | 298 | | 3.7% | -25.9% | 18.7% | 131.4% |
| Short Term Debt | 8 | 8 | 8 | 8 | | -18.0% | 0.0% | 0.0% | 0.0% |
| Long Term Debt | 1,158 | 1,157 | 1,156 | 1,155 | | 4.3% | 2.3% | 2.3% | -0.4% |
Ratios
|
|---|
| Gross Margin | 81.2% | 80.1% | 79.6% | 78.8% | | 45.7% | 45.6% | 45.7% | 44.6% |
| EBITDA Margin | 48.3% | 44.5% | 45.6% | 42.6% | | 26.9% | 23.8% | 25.5% | 23.2% |
| Net Income Margin | 4.2% | 1.2% | 1.7% | 3.5% | | 5.6% | 9.1% | 3.5% | 13.6% |
Peers in Data Processing & Outsourced S
Below you can find Everi Holdings 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. ($SRT) | | 12.8% | 8.9% | -4.8% | 66.4% |
| |
|---|
| Median (55 companies) | | 7.0% | 7.7% | 10.1% | 7.5% |
|---|
| Everi Holdings Inc. ($EVRI) | | 39.4% | 3.9% | 13.4% | -51.8% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Verra Mobility Corp ($VRRM) | | | | 97.4% | 97.5% |
| StoneCo Ltd ($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% |
| WEX Inc. ($WEX) | 85.3% | 83.8% | 54.7% | 58.8% | 63.3% |
| |
|---|
| Median (44 companies) | 39.3% | 39.6% | 39.5% | 39.5% | 40.9% |
|---|
| Everi Holdings Inc. ($EVRI) | 25.8% | 38.3% | 36.1% | 34.5% | 79.9% |
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% |
| Black Knight, Inc. ($BKI) | | | 43.0% | 44.6% | 43.3% |
| |
|---|
| Median (56 companies) | 20.6% | 21.2% | 21.3% | 21.1% | 19.2% |
|---|
| Everi Holdings Inc. ($EVRI) | 9.6% | 14.7% | 3.0% | 20.4% | 45.2% |
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% |
| StoneCo Ltd ($STNE) | | | 7.2% | 18.4% | 8.9% |
| Cardtronics plc ($CATM) | 10.2% | 11.9% | 9.9% | 9.6% | 8.0% |
| Worldpay, Inc. ($WP) | 4.0% | 2.7% | 3.3% | 2.8% | 7.8% |
| |
|---|
| Median (56 companies) | 3.1% | 3.0% | 3.2% | 2.9% | 3.0% |
|---|
| Everi Holdings Inc. ($EVRI) | 3.0% | 9.3% | 9.4% | 9.9% | 21.9% |
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. ($ADP) | 23.9% | 28.9% | 37.9% | 36.6% | 37.5% |
| |
|---|
| Median (62 companies) | 14.1% | 13.1% | 11.7% | 10.7% | 12.1% |
|---|
| Everi Holdings Inc. ($EVRI) | 3.7% | -0.7% | -9.9% | 7.6% | 7.9% |
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 ($ADS) | 9.3x | 9.1x | 10.7x | 10.1x | 9.0x |
| |
|---|
| Median (54 companies) | 0.4x | 0.5x | 1.3x | 2.3x | 2.0x |
|---|
| Everi Holdings Inc. ($EVRI) | 19.4x | 8.6x | 38.5x | 5.2x | 4.1x |
