Performance Technologies S.A. (ATH:PERF) 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 PERF, it is a financially-sound company with 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 digging a bit deeper into my commentary, take a look at the report on Performance Technologies here.
Outstanding track record with excellent balance sheet
In the past couple of years, PERF has ramped up its bottom line by over 100%, with its latest earnings level surpassing its average level over the last five years. The strong earnings growth is reflected in impressive double-digit 35% return to shareholders, which is an notable feat for the company. PERF'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 suggests prudent control over cash and cost by management, which is an important determinant of the company’s health. PERF appears to have made good use of debt, producing operating cash levels of 0.58x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.
PERF is currently trading below its true value, which means the market is undervaluing the company's expected cash flow going forward. According to my intrinsic value of the stock, which is driven by analyst consensus forecast of PERF's earnings, investors now have the opportunity to buy into the stock to reap capital gains. Compared to the rest of the it industry, PERF is also trading below its peers, relative to earnings generated. This supports the theory that PERF is potentially underpriced.
For Performance Technologies, there are three pertinent aspects you should further examine:
- Future Outlook: What are well-informed industry analysts predicting for PERF’s future growth? Take a look at our free research report of analyst consensus for PERF’s outlook.
- Dividend Income vs Capital Gains: Does PERF 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 PERF as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of PERF? 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.