SPAR Group Inc (SGRP): A Business Services Stock with Good Outperformance Potential
SPAR Group Inc (NASDAQ:SGRP), a prominent player in the Business Services industry, is currently trading at $1.25 per share. The company has a market capitalization of $28.951 million and has seen a 3.31% gain in its stock price today. However, over the past four weeks, the stock has experienced a slight dip of -3.97%. Despite this recent downturn, SGRP's GF Score of 84 out of 100 suggests it has good outperformance potential. The GF Score is a comprehensive stock performance ranking system developed by GuruFocus, which has been found to be closely correlated with the long-term performance of stocks. It takes into account five key aspects: Financial Strength, Profitability Rank, Growth Rank, GF Value Rank, and Momentum Rank.
Financial Strength Analysis of SPAR Group Inc
SGRP's Financial Strength rank is 6 out of 10, indicating a relatively strong financial situation. This rank is determined by several factors, including the company's interest coverage of 7.39, which suggests the company can comfortably meet its interest obligations. Additionally, its debt to revenue ratio of 0.08 indicates a low debt burden relative to its revenue. The company's Altman Z-Score of 3.80 further reinforces its financial stability.
Profitability Rank Analysis of SPAR Group Inc
With a Profitability Rank of 7 out of 10, SGRP demonstrates a good level of profitability. The company's operating margin of 3.35% and a Piotroski F-Score of 5 contribute to this rank. Furthermore, the company's profitability has been consistent, with 6 profitable years over the past decade. The trend of the operating margin over the past 5 years averages at 11.10%, indicating an uptrend in profitability.
Growth Rank Analysis of SPAR Group Inc
SGRP's Growth Rank of 7 out of 10 suggests a solid growth trajectory in terms of revenue and profitability. The company's 5-year revenue growth rate stands at 4.80%, although the 3-year revenue growth rate is slightly negative at -0.40%. The 5-year EBITDA growth rate of 4.70% further supports the company's growth potential.
GF Value Rank Analysis of SPAR Group Inc
The company's GF Value Rank is 6 out of 10, suggesting a fair valuation. This rank is determined by the price-to-GF-Value ratio, a proprietary metric calculated based on historical multiples and an adjustment factor based on the company's past returns, growth, and future business performance estimates.
Momentum Rank Analysis of SPAR Group Inc
SGRP's Momentum Rank of 8 out of 10 indicates strong stock price performance. This rank is determined using the standardized momentum ratio and other momentum indicators, reflecting the stock's price performance from 12 months ago to 1 month ago and 6 months ago to 1 month ago.
Comparison with Competitors
When compared to its competitors in the Business Services industry, SGRP stands out with its high GF Score. Lichen China Ltd (NASDAQ:LICN) has a GF Score of 30, Seafarer Exploration Corp (SFRX) has a GF Score of 0, and Wilhelmina International Inc (NASDAQ:WHLM) has a GF Score of 67. This comparative analysis suggests that SGRP has a higher performance potential in the industry. For more details, please visit the competitors page.
In conclusion, SPAR Group Inc's strong GF Score, coupled with its solid financial strength, profitability, growth, and momentum ranks, suggests that the company has good outperformance potential. However, investors should also consider other factors such as market conditions and company-specific risks before making investment decisions.
This article first appeared on GuruFocus.
