A few hours ago it was announced that a famous company is about to be added to one of the world’s leading stock indexes, the S&P 500, on September 18, 2023.
When a company is added to this index it certainly increases its prestige because it becomes one of the 500 best companies listed on the American stock exchange.
In addition, it usually also increases in value in the first few weeks because all ETFs that track the S&P 500 index will have to buy the company’s shares to reflect the new composition of the index.
The company went through difficult times during the lockdown, but has now fully recovered as shown in the following image which shows the trailing 12-month net income trend, which reached almost 2.5 billion dollars, after being negative for 5 billion dollars in the most difficult months of the pandemic (March 2020 to March 2021).
Table of Contents
The company covered by this analysis contains the following 3 sections:
General information such as market value, valuation multiples, sector and industry in which the company operates.
Company performance relative to the S&P 500 index and direction of the short, medium and long-term price trend.
3. Business Data and Business Margins
Numerical and graphical trend of the main business data and business margins in recent years: Revenue, Operating Income and Operating Margin, Net Income and Net Margin, Cash Flow From Operations and Cash Flow From Operations Margin.
*The content of this article is for informational purposes only an in no case constitute an investment advice. Past performance is no guarantee of future performance. To read the complete disclaimer click here.
This first section is introductory and it shows some general information to understand what the company does (Sector, Industry and Description), the market value expressed in billions of dollars (Market Cap) and the stock price (Last Price). In addition, the following 2 main valuation multiples are indicated:
- P/S (Price To Sales):
This multiple relates the market value and revenue of the last 12 months.
- P/E (Price To Earnings):
This multiple relates the market value and the net income of the last 12 months.
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This second section focuses on the performance of the stock price and aims to give a general view of how the company is performing, especially compared to the rest of the market represented by the S&P 500 index.
The “Trend Direction” table indicates whether the company’s price is in a positive or negative trend in the short, medium and long term.
The direction of the trend is based on the comparison between the last recorded price and the average price of the last 20 days (short term), 50 days (medium term) and 200 days (long term). If the latest price is higher than the average price then the trend is positive, if it is lower the trend is negative.
The “Performance vs S&P 500 Index” table shows the comparison between the price performance of the company and the S&P 500 index. The periods considered are from the beginning of the year, in the last year and in the last 3 years. Furthermore, the comparison is also expressed in graphical form.
3. Business Data and Business Margins
This third section focuses on the financial data of the company and on the trend of the last few years to understand if it is able to grow the volume of the business by increasing revenue, produce an improved operating/net income, produce an increased cash flow from operations and improve efficiency through the improvement of the 3 main business margins.
The business data and business margins included in this analysis are the following:
- Operating Income and Operating Margin
- Net Income and Net Margin
- Cash Flow From Operations and CFO Margin
Below is a table containing the main business data and business margins of the last 12 months, compared with the previous 12 months. Furthermore, there are 2 subsections that contain the graphic trend of business data and business margins in recent years.
*Data are expressed in millions of dollars
Key Charts: Business Data | Trailing 12-Months
This first subsection focuses on the key business data (Revenue, Operating Income, Net Income and Cash Flow From Operations) trailing 12-months. The graphs with the trend of the last few years are shown below.
Key Charts: Business Margins | Trailing 12-Months
This second subsection focuses on the key business margins (Operating Margin, Net Margin and Cash Flow From Operations Margin) trailing 12-months. The graphs with the trend of the last few years are shown below.
Furthermore, the first graph shows the revenue growth rate trend in each single quarter of the last few years. This chart is helpful in understanding whether the company is accelerating revenue growth or if they are declining.
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