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Laura BoyetteTrinity RogersAlexis Williams
Sierra BrownChasity YoungBarbara Smith
THE COMPANY Public company that began as a merger in 1996
CEO/President - Ed Heffernan
Headquartered in Plano, Texas – serving the U.S. & Canada
3 subsidiaries – Private Label Services & Credit, Epsilon, LoyaltyOne
Since 1998 – Alliance Data & their subsidiaries have acquired 14 companies
CURRENT STATUS VALUATION MEASURESMarket Cap $13.21
BEnterprise Value $31.24
BTrailing P/E 24.17Forward P/E 12.22PEG Ratio 1.15Price/Sales 1.87Price/Book 7.41Enterprise Value/Revenue
4.43
Enterprise Value/EBDITDA
18.69
STOCK PRICE HISTORYBeta 1.81
52 Week Change -19.11%
S&P 500 52 Week Change
5.83%
52 Week High 290.30
52 Week Low 176.62
50 Day Moving Average
210.55
200 Day Moving Average
211.57
PROFITABILITY
Profit Margin 9.62%Operating Margin
17.79%
WHAT THEY DO
LoyaltyOne• AIR MILES Reward
Program• Short-term Loyalty
Programs• Loyalty Services
• Consulting • Customer analytics• Creative services• Mobile solutions
EpsilonMarketing Services• Agency services• Database design &
management• Data services• Analytical services• Tradition & digital
marketing
Private Label Services & Credit
Receivables Financing • Underwriting & risk
management• Receivables funding Processing Servicing• New account processing• Bill processing• Remittance processing• Customer careMarketing Services
VISION Making data actionable Doing good things that matter Using technology to save lives Strengthening their clients’ brands
1,946,341
2,791,421 3,173,287
3,641,390
4,319,063
5,302,940
6,439,746
Revenue Growth
2009 2010 2011 2012 2013 2104 2015
Transaction5% Re-
demption16%
Finance charges
45%
Market-ing ser-
vices31%
Other revenue 3%
Sources of revenueREVENUE
EXPENSES & INCOME Increase in operating expenses
each year due to: Stock compensation Acquisitions Credit sales Payroll & benefits
Increase in net income each year:
2009 2010 2011 2012 2013 2014 2015$0.00
$1,000,000.00
$2,000,000.00
$3,000,000.00
$4,000,000.00
$5,000,000.00
$6,000,000.00
$7,000,000.00
$8,000,000.00
Income vs Expenses
Total operating expenses Operating income Total interest expense, netNet income
ASSETS, LIABILITIES & SHAREHOLDER’S EQUITY
50%46%
4%
Total Assets Total LiabilitiesTotal Stockholders Equity
Assets:• Credit Card Receivables• Understated
Debt• accumulated by the borrowing of
money to fund operations• Understated
Stockholder’s Equity• Retained earnings & additional
paid-in-capital• Understated
CASH FLOWSHow much cash went into and out of a company during a specific time
Very important to investorsYear ending 2015 - Net Cash from:
Operating activities: $1,705,841 Investing activities: - $3,362,448 Financing activities: $1,772,901
IMPORTANT RATIOS
Ratio 2009 2010 2011 2012 2013 2014 2015Current ratio 1.1077 1.5871 1.7138 1.8145 2.3187 2.1909 2.5369Quick ratio 0.2059 0.1036 0.1341 0.2510 0.3024 0.2887 0.2926Cash ratio 0.1002 0.0360 0.0561 0.1775 0.2149 0.1708 0.1823Debt-to-equity ratio 6.5341 80.9570 12.4084 5.4019 3.2723 1.7565 2.5186Accounts payable turnover 13.0342 12.6820 12.0943 9.7768 12.1377 7.0640 8.6220AR turnover 8.7220 10.6973 10.5462 9.8387 10.9394 7.1344 9.1150
• Current ratio steadily increases• Quick and cash ratios fluctuates over the 7 years • Debt-to-Equity is high from 2009-2011 and then decreases until 2015
• Highest in 2010 at 80.0%• Account payable turnover stays between 7% and 13%• Accounts receivables turnover stays between 7% and 10%
GROWTH
2010 2011 2012 2013 2014 20150.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
Earnings growth Sales growth Assets growth
ROE & ROA
2009 2010 2011 2012 2013 2014 2015
52.69%
838.85%
179.17%
79.90%57.98%
19.61%27.80%
35.76%
30.45%
45.64%
45.74%48.70%
33.11%35.10%
ROE ROA
• High return on equity• CEO, Ed Heffernan does a
good job at utilizing the equity
• Increasing return on assets• Using less assets for
greater return
FORECASTED FUTURE SALES
2017 2018 2019 2020 2021 2022
SALES12,365,515 13,973,032 15,649,796 17,371,274 19,108,401 20,828,157
NET INCOME 721,701 814,125 910,255 1,008,646 1,107,599 1,205,200EQUITY
3,433,174 3,845,155 4,268,122 4,694,934 5,117,478 5,526,876ASSETS
9,536,594 10,680,986 11,855,894 13,041,484 14,215,217 15,352,435CAPITAL
9,536,594 10,680,986 11,855,894 13,041,484 14,215,217 15,352,435
• Increases in:• Sales• Net Income• Equity• Assets• Capital
CONCLUSIONGood company to invest in
Programs and services they offer is exiting for investmentGrowth will continue to increaseRevenue will also continue to increaseCredit cards in high demandOur company dominates the industry
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