ASX share is estimated at F
ASX’s stock (OTCPK: ASXFF, 30-year-old Financials) appears to be fair valued, according to GuruFocus Value’s calculation. The GuruFocus Value is GuruFocus’s estimate of the fair value at which the stock is to trade. It is calculated based on the historical multiples at which the stock has traded, past business growth, and analysts’ estimates of future business performance. If a share’s price is significantly above the GF value line, it is overvalued and its future performance may be poor. On the other hand, if it is significantly below the GF value line, its future return is likely to be higher. At its current price of $ 57.2 per share and market cap of $ 11.2 billion, ASX stock gives all indications of its fair value. The GF value for ASX is shown in the table below.
Since ASX is measured at fair value, its long-term stock return is likely to be close to the growth rate of its business, which has averaged 7.4% over the past three years. and is expected to grow by 2.66% per year over the next three to five years. years.
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Investing in companies with low financial strength presents a higher risk of permanent loss of capital. Thus, it is important to carefully consider the financial strength of a company before deciding whether or not to buy its shares. Examining the cash-to-debt ratio and interest coverage is a great starting point for understanding the financial strength of a business. ASX has a cash-to-debt ratio of 141.65, which is better than 76% of companies in the capital markets industry. GuruFocus ranks the overall financial strength of ASX as 6 out of 10, which indicates that the financial strength of ASX is fair. Here is ASX’s debt and cash flow over the past few years:
Investing in profitable businesses carries less risk, especially in companies that have demonstrated consistent profitability over the long term. Typically, a business with high profit margins offers better performance potential than a business with low profit margins. ASX has been profitable 10 years in the past 10 years. In the past 12 months, the company reported sales of $ 694 million and earnings of $ 1.826 per share. Its operating margin of 68.54% is higher than 89% of companies in the capital markets sector. Overall, GuruFocus rates ASX’s profitability as fair. Here is ASX’s sales and net income for the past few years:
Growth is probably one of the most important factors in the valuation of a business. GuruFocus research has shown that growth is closely tied to the long-term performance of a company’s stocks. If a company’s business is growing, the business typically creates value for its shareholders, especially if the growth is profitable. Likewise, if the income and profits of a business decrease, the value of the business will decrease. ASX’s 3-year average revenue growth rate is within the average for companies in the capital markets industry. ASX’s 3-year average EBITDA growth rate is 4.1%, which ranks among the average for companies in the capital markets industry.
A company’s profitability can also be assessed by comparing its return on invested capital (ROIC) to its weighted average cost of capital (WACC). Return on Invested Capital (ROIC) measures how well a business generates cash flow relative to the capital it has invested in its business. The weighted average cost of capital (WACC) is the rate that a company should pay on average to all its security holders to finance its assets. If the return on invested capital exceeds the weighted average cost of capital, the company is likely to create value for its shareholders. Over the past 12 months, ASX’s ROIC is 3.10 while its WACC is 4.19. The historical ROIC vs WACC comparison of the ASX is shown below:
In conclusion, the ASX stock (OTCPK: ASXFF, 30-year Financials) gives all indications of being fair valued. The company’s financial position is fair and its profitability is fair. Its growth is in the mid-range of companies in the capital markets sector. To learn more about ASX stock, you can view its 30-year financial data here.
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