Downer EDI Ltd
Downer EDI Ltd Fundamental Analysis
Downer EDI Ltd (DOW.AX) shows weak financial fundamentals with a PE ratio of 32.29, profit margin of 1.59%, and ROE of 7.97%. The company generates $10.0B in annual revenue with weak year-over-year growth of -4.44%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 22.1/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze DOW.AX's fundamental strength across five key dimensions:
Efficiency Score
WeakDOW.AX struggles to generate sufficient returns from assets.
Valuation Score
ModerateDOW.AX shows balanced valuation metrics.
Growth Score
WeakDOW.AX faces weak or negative growth trends.
Financial Health Score
ModerateDOW.AX shows balanced financial health with some risks.
Profitability Score
WeakDOW.AX struggles to sustain strong margins.
Key Financial Metrics
Is DOW.AX Expensive or Cheap?
P/E Ratio
DOW.AX trades at 32.29 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, DOW.AX's PEG of 1.61 indicates fair valuation.
Price to Book
The market values Downer EDI Ltd at 2.63 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 6.87 times EBITDA. This is generally considered low.
How Well Does DOW.AX Make Money?
Net Profit Margin
For every $100 in sales, Downer EDI Ltd keeps $1.59 as profit after all expenses.
Operating Margin
Core operations generate 3.00 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $7.97 in profit for every $100 of shareholder equity.
ROA
Downer EDI Ltd generates $2.64 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Downer EDI Ltd generates limited operating cash flow of $564.89M, signaling weaker underlying cash strength.
Free Cash Flow
Downer EDI Ltd produces free cash flow of $453.84M, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $0.68 in free cash annually.
FCF Yield
DOW.AX converts 8.88% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
32.29
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
1.61
vs 25 benchmark
P/B Ratio
Price to book value ratio
2.63
vs 25 benchmark
P/S Ratio
Price to sales ratio
0.51
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.81
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.89
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.08
vs 25 benchmark
ROA
Return on assets percentage
0.03
vs 25 benchmark
ROCE
Return on capital employed
0.10
vs 25 benchmark
How DOW.AX Stacks Against Its Sector Peers
| Metric | DOW.AX Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 32.29 | 25.96 | Worse (Expensive) |
| ROE | 7.97% | 1263.00% | Weak |
| Net Margin | 1.59% | -41827.00% (disorted) | Weak |
| Debt/Equity | 0.81 | 0.79 | Neutral |
| Current Ratio | 0.89 | 10.05 | Weak Liquidity |
| ROA | 2.64% | -1497918.00% (disorted) | Weak |
DOW.AX outperforms its industry in 0 out of 6 key metrics, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Downer EDI Ltd's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
-24.04%
Industry Style: Cyclical, Value, Infrastructure
DecliningEPS CAGR
183.43%
Industry Style: Cyclical, Value, Infrastructure
High GrowthFCF CAGR
225.32%
Industry Style: Cyclical, Value, Infrastructure
High Growth