IQE plc (LON:IQE) is a company with exceptional fundamental characteristics. Upon building up an investment case for a stock, we should look at various aspects. In the case of IQE, it is a company with robust financial health as well as a buoyant future outlook. Below, I’ve touched on some key aspects you should know on a high level. If you’re interested in understanding beyond my high-level commentary, take a look at the report on IQE here.
Flawless balance sheet with high growth potential
Bullish market analysts are forecasting fast-growing IQE to deliver an exceptional sales growth rate of 52.5% over the next year, supported by its outstanding capacity to churn out cash from operating activities, which is predicted to more than double over the next year. This indicates that revenue is driven by high-quality cash from IQE’s day-to-day business as opposed to one-off income. IQE’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 IQE has sufficient cash flows and proper cash management in place, which is an important determinant of the company’s health. IQE currently has no debt on its balance sheet. It has only utilized funding from its equity capital to run the business, 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.
For IQE, there are three fundamental factors you should further examine:
- Historical Performance: What has IQE’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 IQE 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 IQE is currently mispriced by the market.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of IQE? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.