Computer Task Group, Incorporated EBITDA jumped on 10.9% and EBITDA Margin increased slightly on 0.84 pp from 4.3% to 5.1%
02/23/2021 • About Computer Task Group, Incorporated (
$CTG) • By InTwits
Computer Task Group, Incorporated reported 2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 5.1% in 2020, 4.3% in 2019, 1.3% in 2018, 1.8% in 2017, -9.8% in 2016
- Computer Task Group, Incorporated has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.5%. At the same time it's in pair with industry average of 3.7%
- CAPEX is quite volatile: $3m in 2020, $2m in 2019, $16m in 2018, $3m in 2017, $2m in 2016
- The company has business model with low profitability: ROIC is 9.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Computer Task Group, Incorporated's Revenue decreased on 7.1%. Annual revenue decline showed slowdown in 20Q4 - revenue increased on 2.0%. During 2016-2020 Revenue growth topped in 2018 at 19.1% and was decelerating since that time. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased slightly on 0.84 pp from 4.3% to 5.1% in 2020.
Gross Margin increased slightly on 2.0 pp from 19.0% to 21.0% in 2020. Gross Margin grew at 0.60 pp per annum in 2016-2020. SG&A as a % of Revenue increased slightly on 1.2 pp from 17.3% to 18.5% in 2020.
Net Income margin increased slightly on 1.0 pp from 1.0% to 2.1% in 2020.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 0.79% in 2020. CAPEX/Revenue showed almost no change from 2017 to 2020. It's average CAPEX/Revenue for the last three years was 2.0%.
Return on investment
The company operates at low ROIC (9.5%) and ROE (10.5%). ROIC showed almost no change in 2020. ROE increased on 4.2 pp from 6.3% to 10.5% in 2020.
Leverage (Debt)
Debt level is -0.6x Net Debt / EBITDA and 1.2x Debt / EBITDA. Debt dropped on 17.1% while cash jumped on 205%.
Computer Task Group, Incorporated has no short term refinancing risk: cash is higher than short term debt (511.4%).
Valuation and dividends
Computer Task Group, Incorporated's trades at EV/EBITDA 6.4x and P/E 17.2x.
Management team
Computer Task Group, Incorporated's CEO is Filip J L Gyde. Filip J L Gyde has 2 years tenure with the company. John M Laubacker is a the company's CFO. John M Laubacker has spent 3 years at the company.
Financial and operational results
FY ended 12/31/2020
Computer Task Group, Incorporated ($CTG) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 324.9 | 301.2 | 358.8 | 394.2 | 366.1 | -7.1% |
| Gross Profit | 59.2 | 56.1 | 68.5 | 75.0 | 77.0 | 2.6% |
| SG&A | 55.2 | 52.1 | 66.4 | 68.1 | 67.8 | -0.4% |
| EBITDA | -31.7 | 5.5 | 4.6 | 17.0 | 18.8 | 10.9% |
| Net Income | -34.6 | 0.8 | -2.8 | 4.1 | 7.6 | 85.2% |
Balance Sheet
|
|---|
| Cash | 9.4 | 11.2 | 12.4 | 10.8 | 32.9 | 204.8% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 5.9 | 6.4 | 8.9% |
| Long Term Debt | 4.7 | 4.4 | 3.6 | 20.6 | 15.6 | -24.6% |
Cash flow
|
|---|
| Capex | 2.2 | 2.5 | 16.0 | 2.4 | 2.9 | 18.1% |
Ratios
|
|---|
| Revenue growth | -12.1% | -7.3% | 19.1% | 9.9% | -7.1% | |
| EBITDA growth | -351.6% | -117.4% | -16.4% | 267.8% | 10.9% | |
|
|---|
| Gross Margin | 18.2% | 18.6% | 19.1% | 19.0% | 21.0% | 2.0% |
| EBITDA Margin | -9.8% | 1.8% | 1.3% | 4.3% | 5.1% | 0.8% |
| SG&A, % of revenue | 17.0% | 17.3% | 18.5% | 17.3% | 18.5% | 1.2% |
| Net Income Margin | -10.7% | 0.3% | -0.8% | 1.0% | 2.1% | 1.0% |
| CAPEX, % of revenue | 0.7% | 0.8% | 4.5% | 0.6% | 0.8% | 0.2% |
|
|---|
| ROIC | -32.8% | 4.7% | 2.7% | 9.0% | 9.5% | 0.5% |
| ROE | -35.2% | 1.0% | -3.9% | 6.3% | 10.5% | 4.2% |
| Net Debt/EBITDA | | -1.2x | -1.9x | 0.9x | -0.6x | -1.5x |
Computer Task Group, Incorporated ($CTG) key quoterly financial indicators
| mln. $ | 20Q1 | 20Q2 | 20Q3 | 20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 87 | 89 | 89 | 101 | | -10.6% | -11.2% | -8.8% | 2.0% |
| EBITDA | 4 | 4 | 4 | 6 | | 35.7% | -0.0% | 1.8% | 11.7% |
| Net Income | 1 | 2 | 3 | 2 | | 81.0% | 86.5% | 222.1% | 14.0% |
Balance Sheet
|
|---|
| Cash | 31 | 34 | 33 | 33 | | 139.8% | 204.0% | 212.5% | 204.8% |
| Short Term Debt | 6 | 5 | 6 | 6 | | 25.4% | -1.7% | 11.5% | 8.9% |
| Long Term Debt | 27 | 27 | 21 | 16 | | 25.0% | 3.3% | 17.3% | -24.6% |
Ratios
|
|---|
| Gross Margin | 19.6% | 21.0% | 22.1% | 21.3% | | 1.4% | 2.8% | 2.8% | 1.0% |
| EBITDA Margin | 5.2% | 4.8% | 4.9% | 5.7% | | 1.8% | 0.5% | 0.5% | 0.5% |
| Net Income Margin | 1.3% | 2.0% | 3.2% | 1.9% | | 0.7% | 1.0% | 2.3% | 0.2% |
Peers in IT Consulting & Other Services
Below you can find Computer Task Group, Incorporated benchmarking vs. other companies in IT Consulting & Other Services 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 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| CLPS Incorporation ($CLPS) | - | 8.1% | 56.0% | 32.7% | 37.7% |
| Endava plc ($DAVA) | - | 38.1% | 36.5% | 32.3% | 21.9% |
| EPAM Systems, Inc. ($EPAM) | - | 25.0% | 27.1% | 24.5% | 15.9% |
| Switch, Inc. ($SWCH) | - | 18.8% | 7.3% | 13.9% | 10.7% |
| Perficient, Inc. ($PRFT) | - | -0.4% | 2.7% | 13.5% | 8.2% |
| |
|---|
| Median (14 companies) | 8.3% | 4.8% | 3.6% | 5.4% | 2.3% |
|---|
| Computer Task Group, Incorporated ($CTG) | - | -7.3% | 19.1% | 9.9% | -7.1% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Gartner, Inc. ($IT) | 61.3% | 60.1% | 63.1% | 63.5% | 67.2% |
| Teradata Corporation ($TDC) | 51.2% | 47.5% | 47.4% | 50.3% | 55.5% |
| Switch, Inc. ($SWCH) | 47.0% | 47.6% | 44.7% | 47.5% | 45.4% |
| Perficient, Inc. ($PRFT) | 31.1% | 33.3% | 35.8% | 37.4% | 37.8% |
| Cognizant Technology Solutions Corporation ($CTSH) | 39.9% | 38.2% | 39.0% | 36.6% | 35.9% |
| |
|---|
| Median (14 companies) | 29.5% | 30.2% | 30.4% | 35.9% | 34.4% |
|---|
| Computer Task Group, Incorporated ($CTG) | 18.2% | 18.6% | 19.1% | 19.0% | 21.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Switch, Inc. ($SWCH) | 37.0% | 28.5% | 39.8% | 44.1% | 47.8% |
| Amdocs Limited ($DOX) | 18.7% | 18.9% | 16.1% | 19.0% | 21.2% |
| Gartner, Inc. ($IT) | 15.0% | 7.1% | 13.0% | 16.2% | 19.8% |
| EPAM Systems, Inc. ($EPAM) | 13.5% | 13.9% | 15.3% | 17.9% | 19.4% |
| Accenture plc ($ACN) | 15.9% | 14.8% | 16.3% | 16.7% | 18.7% |
| |
|---|
| Median (14 companies) | 6.8% | 7.1% | 8.0% | 14.6% | 13.6% |
|---|
| Computer Task Group, Incorporated ($CTG) | -9.8% | 1.8% | 1.3% | 4.3% | 5.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Switch, Inc. ($SWCH) | 90.2% | 106.4% | 67.9% | 66.6% | 67.8% |
| Amdocs Limited ($DOX) | 3.5% | 3.4% | 5.8% | 3.1% | 4.9% |
| ServiceSource International, Inc. ($SREV) | 10.4% | 7.2% | 6.5% | 4.7% | 4.0% |
| Endava plc ($DAVA) | 2.4% | 4.1% | 2.5% | 2.6% | 2.8% |
| EPAM Systems, Inc. ($EPAM) | 2.5% | 2.1% | 2.0% | 4.3% | 2.6% |
| |
|---|
| Median (14 companies) | 1.2% | 1.4% | 1.5% | 2.4% | 2.2% |
|---|
| Computer Task Group, Incorporated ($CTG) | 0.7% | 0.8% | 4.5% | 0.6% | 0.8% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Accenture plc ($ACN) | 81.3% | 61.7% | 66.1% | 62.1% | 40.7% |
| EPAM Systems, Inc. ($EPAM) | 18.2% | 18.9% | 21.2% | 20.2% | 19.4% |
| Cognizant Technology Solutions Corporation ($CTSH) | 21.3% | 21.9% | 23.8% | 20.4% | 17.5% |
| Amdocs Limited ($DOX) | 13.0% | 14.4% | 11.9% | 15.9% | 14.5% |
| Gartner, Inc. ($IT) | 41.0% | -0.2% | 6.9% | 10.8% | 12.7% |
| |
|---|
| Median (14 companies) | 7.7% | 6.4% | 7.0% | 11.0% | 8.0% |
|---|
| Computer Task Group, Incorporated ($CTG) | -32.8% | 4.7% | 2.7% | 9.0% | 9.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Switch, Inc. ($SWCH) | 4.0x | 3.2x | 3.3x | 4.0x | 4.0x |
| Gartner, Inc. ($IT) | 0.6x | 11.7x | 4.1x | 4.1x | 2.6x |
| Perficient, Inc. ($PRFT) | 0.4x | 1.0x | 1.3x | 1.0x | 1.5x |
| ServiceSource International, Inc. ($SREV) | 156.0x | - | -35.5x | 2.9x | 0.6x |
| Teradata Corporation ($TDC) | -1.1x | -1.5x | -1.3x | 0.9x | 0.5x |
| |
|---|
| Median (12 companies) | 0.1x | 0.6x | 0.8x | -0.4x | -0.1x |
|---|
| Computer Task Group, Incorporated ($CTG) | - | -1.2x | -1.9x | 0.9x | -0.6x |
