Perficient, Inc. reports 18.7% Net Income decline in 2020 while 8.2% Revenue growth
02/25/2021 • About Perficient, Inc. (
$PRFT) • By InTwits
Perficient, Inc. reported 2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Perficient, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.2%. At the same time it's in pair with industry average of 14.0%
- CAPEX is quite volatile: $5m in FY2020, $15m in FY2019, $12m in FY2018, $15m in FY2017, $73m in FY2016
- The company has business model with low profitability: ROIC is 9.8%
- It operates with high leverage: Net Debt/EBITDA is 1.5x while industry average is 0.6x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Perficient, Inc.'s Revenue increased on 8.2%. Revenue growth showed acceleration in 20Q4 - it increased 12.0% YoY. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 5.3 pp from -3.5% to 1.9% in 2020. EBITDA Margin followed a growing trend at 1.4 pp per annum in 2016-2020.
Gross Margin showed almost no change in 2020. Gross Margin grew at 1.8 pp per annum in 2016-2020. SG&A as a % of Revenue decreased slightly on 1.7 pp from 23.7% to 22.0% in 2020.
Net Income margin decreased slightly on 1.6 pp from 6.6% to 4.9% in 2020.
Investments (CAPEX, working capital and M&A)
Perficient, Inc.'s CAPEX/Revenue was 1.1% in 2020. CAPEX/Revenue showed almost no change from 2017 to 2020. Average CAPEX/Revenue for the last three years was 1.2%.
Return on investment
The company operates at low ROIC (9.8%) and ROE (7.8%). ROIC decreased slightly on 1.4 pp from 11.2% to 9.8% in 2020. ROE decreased on 2.3 pp from 10.1% to 7.8% in 2020.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.5x and Debt / EBITDA is 2.4x. Net Debt / EBITDA surged on 0.5x from 1.0x to 1.5x in 2020. Debt surged on 45.5% while cash jumped on 17.6%.
Perficient, Inc. has no short term refinancing risk: cash is higher than short term debt (806.2%).
Valuation and dividends
The company's trades at EV/EBITDA 20.8x and P/E 60.2x.
Management team
Perficient, Inc.'s CEO is Jeffrey S Davis. Jeffrey S Davis has 4 years tenure with the company. Perficient, Inc.'s CFO Paul E Martin has spent 14 years with the company.
Financial and operational results
FY ended 12/31/2020
Perficient, Inc. ($PRFT) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 487.0 | 485.3 | 498.4 | 565.5 | 612.1 | 8.2% |
| Gross Profit | 151.3 | 161.5 | 178.5 | 211.3 | 231.4 | 9.5% |
| SG&A | | 108.2 | 118.5 | 134.2 | 134.7 | 0.4% |
| EBITDA | 51.7 | 48.7 | 56.4 | 84.5 | 94.2 | 11.5% |
| Net Income | 21.7 | 18.6 | 24.6 | 37.1 | 30.2 | -18.7% |
Balance Sheet
|
|---|
| Cash | 10.1 | 6.3 | 45.0 | 70.7 | 83.2 | 17.6% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 9.0 | 10.3 | 14.8% |
| Long Term Debt | 32.0 | 55.0 | 120.1 | 144.3 | 212.7 | 47.4% |
Cash flow
|
|---|
| Capex | 6.1 | 4.3 | 4.6 | 9.3 | 6.7 | -27.3% |
Ratios
|
|---|
| Revenue growth | 2.8% | -0.4% | 2.7% | 13.5% | 8.2% | |
| EBITDA growth | -3.5% | -5.8% | 15.7% | 50.0% | 11.5% | |
|
|---|
| Gross Margin | 31.1% | 33.3% | 35.8% | 37.4% | 37.8% | 0.4% |
| EBITDA Margin | 10.6% | 10.0% | 11.3% | 14.9% | 15.4% | 0.4% |
| SG&A, % of revenue | | 22.3% | 23.8% | 23.7% | 22.0% | -1.7% |
| Net Income Margin | 4.5% | 3.8% | 4.9% | 6.6% | 4.9% | -1.6% |
| CAPEX, % of revenue | 1.2% | 0.9% | 0.9% | 1.6% | 1.1% | -0.5% |
|
|---|
| ROIC | 8.4% | 7.1% | 8.0% | 11.2% | 9.8% | -1.4% |
| ROE | 6.1% | 5.1% | 6.8% | 10.1% | 7.8% | -2.3% |
| Net Debt/EBITDA | 0.4x | 1.0x | 1.3x | 1.0x | 1.5x | 0.5x |
Perficient, Inc. ($PRFT) key quoterly financial indicators
| mln. $ | 20Q1 | 20Q2 | 20Q3 | 20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 146 | 146 | 158 | 163 | | 8.8% | 3.2% | 9.0% | 12.0% |
| EBITDA | 20 | 20 | 28 | 27 | | 16.9% | -1.5% | 19.4% | 17.5% |
| Net Income | 9 | 7 | 6 | 8 | | 27.7% | -22.5% | -36.8% | -28.6% |
Balance Sheet
|
|---|
| Cash | 29 | 20 | 50 | 83 | | 5.7% | -43.0% | 37.4% | 17.6% |
| Short Term Debt | 10 | 11 | 10 | 10 | | 41.4% | 33.8% | 17.4% | 14.8% |
| Long Term Debt | 148 | 164 | 219 | 213 | | 8.6% | 14.9% | 52.7% | 47.4% |
Ratios
|
|---|
| Gross Margin | 36.0% | 37.7% | 38.7% | 38.7% | | 0.3% | 0.8% | 0.3% | 0.3% |
| EBITDA Margin | 14.0% | 13.9% | 17.5% | 16.8% | | 1.0% | -0.7% | 1.5% | 0.8% |
| Net Income Margin | 6.2% | 4.5% | 3.9% | 5.2% | | 0.9% | -1.5% | -2.8% | -2.9% |
Peers in IT Consulting & Other Services
Below you can find Perficient, Inc. 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% |
| Research Solutions Inc/CA ($RSSS) | - | -25.1% | 8.8% | 2.8% | 7.9% |
| |
|---|
| Median (14 companies) | 8.3% | 4.8% | 4.3% | 5.4% | 0.6% |
|---|
| Perficient, Inc. ($PRFT) | - | -0.4% | 2.7% | 13.5% | 8.2% |
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. ($SWCH) | 47.0% | 47.6% | 44.7% | 47.5% | 45.4% |
| Cognizant Technology Solutions Corporation ($CTSH) | 39.9% | 38.2% | 39.0% | 36.6% | 35.9% |
| EPAM Systems, Inc. ($EPAM) | 36.5% | 36.5% | 35.6% | 35.1% | 34.9% |
| |
|---|
| Median (14 companies) | 28.8% | 28.8% | 29.4% | 35.1% | 32.7% |
|---|
| Perficient, Inc. ($PRFT) | 31.1% | 33.3% | 35.8% | 37.4% | 37.8% |
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 ($ACN) | 15.9% | 14.8% | 16.3% | 16.7% | 18.7% |
| |
|---|
| Median (14 companies) | 6.7% | 6.9% | 7.2% | 13.9% | 11.7% |
|---|
| Perficient, Inc. ($PRFT) | 10.6% | 10.0% | 11.3% | 14.9% | 15.4% |
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. ($EPAM) | 2.5% | 2.1% | 2.0% | 4.3% | 2.6% |
| |
|---|
| Median (14 companies) | 1.1% | 1.4% | 1.5% | 2.4% | 2.2% |
|---|
| Perficient, Inc. ($PRFT) | 1.2% | 0.9% | 0.9% | 1.6% | 1.1% |
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. ($IT) | 41.0% | -0.2% | 6.9% | 10.8% | 12.7% |
| |
|---|
| Median (14 companies) | 7.3% | 4.7% | 6.9% | 9.9% | 7.8% |
|---|
| Perficient, Inc. ($PRFT) | 8.4% | 7.1% | 8.0% | 11.2% | 9.8% |
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 |
| 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 |
| Amdocs Limited ($DOX) | -0.8x | -0.9x | -0.7x | -0.6x | 0.1x |
| |
|---|
| Median (12 companies) | 0.1x | 0.2x | 0.1x | -0.4x | -0.4x |
|---|
| Perficient, Inc. ($PRFT) | 0.4x | 1.0x | 1.3x | 1.0x | 1.5x |
