Why Care.com, Inc. (NYSE:CRCM) Is An Attractive Investment To Consider
Building up an investment case requires looking at a stock holistically. Today I've chosen to put the spotlight on Care.com, Inc. (NYSE:CRCM) due to its excellent fundamentals in more than one area. CRCM is a financially-sound company with a a great track record of performance, trading at a great value. 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, take a look at the report on Care.com here.
Outstanding track record with flawless balance sheet
Over the past few years, CRCM has more than doubled its earnings, with its most recent figure exceeding its annual average over the past five years. This strong performance generated a robust double-digit return on equity of 25%, which is what investors like to see! CRCM's ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This indicates that CRCM has sufficient cash flows and proper cash management in place, which is a key determinant of the company’s health. CRCM currently has no debt on its balance sheet. This means it is running its business only on equity capital funding, which is typically normal for a small-cap company. Investors’ risk associated with debt is virtually non-existent and the company has plenty of headroom to grow debt in the future, should the need arise.
CRCM is currently trading below its true value, which means the market is undervaluing the company's expected cash flow going forward. Investors have the opportunity to buy into the stock to reap capital gains, if CRCM's projected earnings trajectory does follow analyst consensus growth, which determines my intrinsic value of the company. Compared to the rest of the interactive media and services industry, CRCM is also trading below its peers, relative to earnings generated. This bolsters the proposition that CRCM's price is currently discounted.
Next Steps:
For Care.com, I've compiled three relevant factors you should further examine:
Future Outlook: What are well-informed industry analysts predicting for CRCM’s future growth? Take a look at our free research report of analyst consensus for CRCM’s outlook.
Dividend Income vs Capital Gains: Does CRCM return gains to shareholders through reinvesting in itself and growing earnings, or redistribute a decent portion of earnings as dividends? Our historical dividend yield visualization quickly tells you what your can expect from CRCM as an investment.
Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of CRCM? 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 editorial-team@simplywallst.com. 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.
