Park City Group, Inc. reports 59.2% Net Income decline in 2020 and 10.3 pp EBITDA Margin decline from 21.7% to 11.4%
09/28/2020 • About Park City Group, Inc. (
$PCYG) • By InTwits
Park City Group, Inc. reported FY2020 financial results today. Here are the key drivers of the company's long term financial model:
- EBITDA Margin is quite volatile: 11.4% in FY2020, 21.7% in FY2019, 18.8% in FY2018, 23.2% in FY2017, 8.5% in FY2016
- Park City Group, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.4%. At the same time it's in pair with industry average of 7.7%
- CAPEX is quite volatile: $1m in FY2020, $1m in FY2019, $0m in FY2018, $2m in FY2017, $0m in FY2016
- The company has potentially unprofitable business model: ROIC is 3.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue decreased on 5.3%. During the last 5 years Revenue growth topped in FY2017 at 35.2% and was decelerating since that time. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 4.9 pp from -6.2% to -1.2% in FY2020.
Gross Margin decreased on 7.4 pp from 72.5% to 65.1% in FY2020. SG&A as a % of Revenue increased on 2.7 pp from 50.8% to 53.5% in FY2020.
Net Income margin dropped on 10.5 pp from 18.4% to 8.0% in FY2020.
Investments (CAPEX, working capital and M&A)
Park City Group, Inc.'s CAPEX/Revenue was 3.2% in FY2020. The company showed decline in CAPEX/Revenue of 7.1 pp from 10.3% in FY2017 to 3.2% in FY2020. It's average level of CAPEX/Revenue for the last three years was 3.7%.
Return on investment
The company operates at low ROIC (3.0%) and ROE (2.3%). ROIC decreased on 5.5 pp from 8.5% to 3.0% in FY2020. ROE decreased on 5.7 pp from 8.0% to 2.3% in FY2020.
Leverage (Debt)
Debt level is -5.6x Net Debt / EBITDA and 3.3x Debt / EBITDA. Debt jumped on 27.2% while cash increased on 9.3%.
Park City Group, Inc. has no short term refinancing risk: cash is higher than short term debt (367.5%).
Valuation and dividends
The company's trades at EV/EBITDA 37.9x and P/E 62.4x.
Management team
Randall K Fields "Randy" is a the company's CEO. Randall K Fields "Randy" has spent 18 years with the company. Park City Group, Inc.'s CFO is John R Merrill. John R Merrill has 5 years tenure at the company.
Financial and operational results
FY ended 06/30/2020
Park City Group, Inc. ($PCYG) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 14.011 | 18.939 | 22.036 | 21.170 | 20.038 | -5.3% |
| Gross Profit | 9.731 | 13.621 | 15.449 | 15.340 | 13.041 | -15.0% |
| SG&A | 8.536 | 9.234 | 11.298 | 10.749 | 10.724 | -0.2% |
| EBITDA | 1.195 | 4.387 | 4.151 | 4.591 | 2.281 | -50.3% |
| Net Income | 0.667 | 3.778 | 3.409 | 3.902 | 1.593 | -59.2% |
Balance Sheet
|
|---|
| Cash | 11.443 | 14.054 | 14.892 | 18.609 | 20.345 | 9.3% |
| Short Term Debt | 2.739 | 3.169 | 3.418 | 4.955 | 5.536 | 11.7% |
| Long Term Debt | 0.491 | 1.997 | 1.592 | 0.921 | 1.935 | 110.2% |
Cash flow
|
|---|
| Capex | 0.081 | 1.957 | 0.204 | 1.448 | 0.650 | -55.1% |
Ratios
|
|---|
| Revenue growth | 2.7% | 35.2% | 16.4% | -3.9% | -5.3% | |
| EBITDA growth | -135.9% | 267.2% | -5.4% | 10.6% | -50.3% | |
|
|---|
| Gross Margin | 69.5% | 71.9% | 70.1% | 72.5% | 65.1% | -7.4% |
| EBITDA Margin | 8.5% | 23.2% | 18.8% | 21.7% | 11.4% | -10.3% |
| SG&A, % of revenue | 60.9% | 48.8% | 51.3% | 50.8% | 53.5% | 2.7% |
| Net Income Margin | 4.8% | 19.9% | 15.5% | 18.4% | 8.0% | -10.5% |
| CAPEX, % of revenue | 0.6% | 10.3% | 0.9% | 6.8% | 3.2% | -3.6% |
|
|---|
| ROIC | 2.1% | 10.4% | 8.2% | 8.5% | 3.0% | -5.5% |
| ROE | -0.2% | 9.0% | 7.5% | 8.0% | 2.3% | -5.7% |
| Net Debt/EBITDA | -6.9x | -2.0x | -2.4x | -2.8x | -5.6x | -2.9x |
Park City Group, Inc. ($PCYG) key quoterly financial indicators
| mln. $ | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 5 | 5 | 5 | 6 | | - | - | - | - |
| EBITDA | 0 | 1 | 0 | 1 | | - | - | - | - |
| Net Income | 0 | 1 | 0 | 0 | | - | - | - | - |
Balance Sheet
|
|---|
| Cash | 18 | 19 | 18 | 20 | | - | - | - | - |
| Short Term Debt | 5 | 5 | 5 | 6 | | - | - | - | - |
| Long Term Debt | 2 | 2 | 1 | 2 | | - | - | - | - |
Ratios
|
|---|
| Gross Margin | 61.9% | 70.5% | 70.4% | 58.8% | | - | - | - | - |
| EBITDA Margin | 7.0% | 17.6% | 9.3% | 11.5% | | - | - | - | - |
| Net Income Margin | 3.7% | 13.7% | 5.9% | 8.3% | | - | - | - | - |
Peers in Application Software
Below we provide Park City Group, Inc. benchmarking against other companies in Application Software industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| VirnetX Holding Corp ($VHC) | - | -0.2% | -95.9% | 34.9% | 355,942.4% |
| AudioEye, Inc. ($AEYE) | - | 175.5% | 106.6% | 90.2% | 90.2% |
| Cloudera, Inc. ($CLDR) | - | 57.2% | 42.6% | 28.9% | 65.5% |
| Integrated Ventures Inc ($INTV) | - | - | - | -8.9% | 62.7% |
| Smartsheet Inc. ($SMAR) | - | 64.3% | 66.1% | 59.7% | 52.4% |
| |
|---|
| Median (92 companies) | 12.0% | 14.8% | 15.1% | 19.5% | 14.7% |
|---|
| Park City Group, Inc. ($PCYG) | - | 35.2% | 16.4% | -3.9% | -5.3% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Aware, Inc. ($AWRE) | 90.3% | 94.6% | 92.3% | 89.7% | 92.8% |
| Alteryx, Inc. ($AYX) | 81.3% | 83.4% | 91.0% | 90.6% | 91.1% |
| Autodesk, Inc. ($ADSK) | 85.2% | 83.2% | 85.2% | 88.9% | 90.1% |
| Smith Micro Software, Inc. ($SMSI) | 73.2% | 77.9% | 83.5% | 90.9% | 89.9% |
| Cadence Design Systems, Inc. ($CDNS) | 85.9% | 87.8% | 87.9% | 88.6% | 88.6% |
| |
|---|
| Median (89 companies) | 63.8% | 64.4% | 65.3% | 67.9% | 70.6% |
|---|
| Park City Group, Inc. ($PCYG) | 69.5% | 71.9% | 70.1% | 72.5% | 65.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| VirnetX Holding Corp ($VHC) | -1,837.2% | -1,118.0% | -40,379.4% | -23,127.1% | 52.2% |
| j2 Global, Inc. ($JCOM) | 41.7% | 36.5% | 35.7% | 38.6% | 40.5% |
| Intelligent Systems Corporation ($INS) | -5.4% | -12.8% | 33.6% | 43.6% | 40.4% |
| Adobe Inc. ($ADBE) | 31.2% | 34.2% | 35.3% | 35.8% | 39.7% |
| SS&C Technologies Holdings, Inc. ($SSNC) | 34.9% | 37.9% | 27.7% | 38.2% | 38.3% |
| |
|---|
| Median (89 companies) | -5.3% | -4.2% | -3.3% | 2.7% | 6.8% |
|---|
| Park City Group, Inc. ($PCYG) | 8.5% | 23.2% | 18.8% | 21.7% | 11.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| MicroStrategy Incorporated ($MSTR) | 0.5% | 0.8% | 1.4% | 2.1% | 234.8% |
| Integrated Ventures Inc ($INTV) | - | - | 199.9% | 15.2% | 27.2% |
| Intelligent Systems Corporation ($INS) | 3.8% | 9.7% | 4.3% | 4.9% | 19.2% |
| LivePerson, Inc. ($LPSN) | 5.5% | 7.9% | 8.8% | 16.3% | 11.4% |
| PROS Holdings, Inc. ($PRO) | 4.7% | 0.8% | 0.7% | 2.1% | 11.3% |
| |
|---|
| Median (87 companies) | 3.0% | 2.3% | 2.4% | 2.9% | 2.5% |
|---|
| Park City Group, Inc. ($PCYG) | 0.6% | 10.3% | 0.9% | 6.8% | 3.2% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| VirnetX Holding Corp ($VHC) | -210.9% | -256.8% | -416.3% | -247.2% | 137.3% |
| Manhattan Associates, Inc. ($MANH) | 99.3% | 102.5% | 80.9% | 71.7% | 53.4% |
| Citrix Systems, Inc. ($CTXS) | 16.1% | 16.7% | 25.2% | 29.8% | 33.5% |
| Sonic Foundry, Inc. ($SOFO) | -18.1% | -50.6% | -786.4% | - | 31.3% |
| Paycom Software, Inc. ($PAYC) | 75.4% | 51.1% | 47.5% | 47.5% | 28.7% |
| |
|---|
| Median (92 companies) | -9.8% | -11.8% | -10.6% | -4.5% | -2.2% |
|---|
| Park City Group, Inc. ($PCYG) | 2.1% | 10.4% | 8.2% | 8.5% | 3.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Dropbox, Inc. ($DBX) | - | -3.8x | - | 2.4x | 1,341.0x |
| Avaya Holdings Corp. ($AVYA) | - | - | 7.4x | - | 77.9x |
| Alteryx, Inc. ($AYX) | - | - | 2.5x | 6.1x | 32.2x |
| Five9, Inc. ($FIVN) | -6.7x | -8.6x | 7.3x | 5.3x | 17.6x |
| Synchronoss Technologies, Inc. ($SNCR) | - | - | - | - | 11.6x |
| |
|---|
| Median (53 companies) | -0.9x | -0.8x | -0.6x | 0.4x | 0.3x |
|---|
| Park City Group, Inc. ($PCYG) | -6.9x | -2.0x | -2.4x | -2.8x | -5.6x |
