Building up an investment case requires looking at a stock holistically. Today I've chosen to put the spotlight on ChannelAdvisor Corporation (NYSE:ECOM) due to its excellent fundamentals in more than one area. ECOM is a company with impressive financial health as well as an optimistic growth outlook. Below, I've touched on some key aspects you should know on a high level. For those interested in understanding where the figures come from and want to see the analysis, read the full report on ChannelAdvisor here.
Flawless balance sheet with reasonable growth potential
ECOM is an attractive stock for growth-seeking investors, with an expected earnings growth of 53% in the upcoming year, bolstered by its outstanding cash-generating ability, as analysts predict its operating cash flows will more than double over the same time period. This is a sustainable driver of high-quality earnings, as opposed to pure cost-cutting activities. ECOM's strong financial health means that all of its upcoming liability payments are able to be met by its current cash and short-term investment holdings. This indicates that ECOM has sufficient cash flows and proper cash management in place, which is a crucial insight into the health of the company. Investors should not worry about ECOM’s debt levels because the company has none! This means it is running its business only on equity capital funding, which is typically normal for a small-cap company. ECOM has plenty of financial flexibility, without debt obligations to meet in the short term, as well as the headroom to raise debt should it need to in the future.
For ChannelAdvisor, I've put together three pertinent factors you should look at:
- Historical Performance: What has ECOM's returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
- Valuation: What is ECOM worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether ECOM is currently mispriced by the market.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of ECOM? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.