Gates Industrial Corporation plc Fundamental Analysis (NYSE: GTES)
Gates Industrial Corporation plc Fundamental Analysis (NYSE: GTES)
Gates Industrial Corporation plc (NYSE: GTES) shows moderate financial fundamentals with a PE ratio of 19.59, profit margin of 10.38%, and ROE of 10.71%. The company generates $3.5B in annual revenue with weak year-over-year growth of 1.03%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 45.2/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze GTES's fundamental strength across five key dimensions:
Efficiency Score
WeakGTES struggles to generate sufficient returns from assets.
Valuation Score
ExcellentGTES trades at attractive valuation levels.
Growth Score
ModerateGTES shows steady but slowing expansion.
Financial Health Score
ExcellentGTES maintains a strong and stable balance sheet.
Profitability Score
WeakGTES struggles to sustain strong margins.
Key Financial Metrics
Is GTES Expensive or Cheap?
P/E Ratio
GTES trades at 19.59 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, GTES's PEG of 0.24 indicates potential undervaluation.
Price to Book
The market values Gates Industrial Corporation plc at 2.02 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 7.70 times EBITDA. This is generally considered low.
How Well Does GTES Make Money?
Net Profit Margin
For every $100 in sales, Gates Industrial Corporation plc keeps $10.38 as profit after all expenses.
Operating Margin
Core operations generate 14.71 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $10.71 in profit for every $100 of shareholder equity.
ROA
Gates Industrial Corporation plc generates $4.92 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Gates Industrial Corporation plc produces operating cash flow of $477.38M, showing steady but balanced cash generation.
Free Cash Flow
Gates Industrial Corporation plc generates strong free cash flow of $398.65M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $1.57 in free cash annually.
FCF Yield
GTES converts 5.61% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
19.59
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.24
vs 25 benchmark
P/B Ratio
Price to book value ratio
2.02
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.03
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.67
vs 25 benchmark
Current Ratio
Current assets to current liabilities
3.24
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.11
vs 25 benchmark
ROA
Return on assets percentage
0.05
vs 25 benchmark
ROCE
Return on capital employed
0.08
vs 25 benchmark
How GTES Stacks Against Its Sector Peers
| Metric | GTES Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 19.59 | 30.91 | Better (Cheaper) |
| ROE | 10.71% | 1122.00% | Weak |
| Net Margin | 10.38% | -21289.00% (disorted) | Strong |
| Debt/Equity | 0.67 | 0.76 | Neutral |
| Current Ratio | 3.24 | 21.80 | Strong Liquidity |
| ROA | 4.92% | -1330634.00% (disorted) | Weak |
GTES outperforms its industry in 3 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Gates Industrial Corporation plc's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
36.84%
Industry Style: Cyclical, Value, Infrastructure
High GrowthEPS CAGR
251.45%
Industry Style: Cyclical, Value, Infrastructure
High GrowthFCF CAGR
71.74%
Industry Style: Cyclical, Value, Infrastructure
High Growth