ScanSource, Inc.
ScanSource, Inc. Fundamental Analysis
ScanSource, Inc. (SCSC) shows weak financial fundamentals with a PE ratio of 10.84, profit margin of 2.44%, and ROE of 8.14%. The company generates $3.0B in annual revenue with weak year-over-year growth of -6.72%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 39.9/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze SCSC's fundamental strength across five key dimensions:
Efficiency Score
WeakSCSC struggles to generate sufficient returns from assets.
Valuation Score
ModerateSCSC shows balanced valuation metrics.
Growth Score
WeakSCSC faces weak or negative growth trends.
Financial Health Score
ExcellentSCSC maintains a strong and stable balance sheet.
Profitability Score
WeakSCSC struggles to sustain strong margins.
Key Financial Metrics
Is SCSC Expensive or Cheap?
P/E Ratio
SCSC trades at 10.84 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, SCSC's PEG of 11.68 indicates potential overvaluation.
Price to Book
The market values ScanSource, Inc. at 0.88 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 5.78 times EBITDA. This is generally considered low.
How Well Does SCSC Make Money?
Net Profit Margin
For every $100 in sales, ScanSource, Inc. keeps $2.44 as profit after all expenses.
Operating Margin
Core operations generate 3.11 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $8.14 in profit for every $100 of shareholder equity.
ROA
ScanSource, Inc. generates $4.24 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
ScanSource, Inc. generates limited operating cash flow of $128.21M, signaling weaker underlying cash strength.
Free Cash Flow
ScanSource, Inc. produces free cash flow of $119.87M, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $5.46 in free cash annually.
FCF Yield
SCSC converts 14.87% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
10.84
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
11.68
vs 25 benchmark
P/B Ratio
Price to book value ratio
0.88
vs 25 benchmark
P/S Ratio
Price to sales ratio
0.27
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.13
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.96
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.08
vs 25 benchmark
ROA
Return on assets percentage
0.04
vs 25 benchmark
ROCE
Return on capital employed
0.09
vs 25 benchmark
How SCSC Stacks Against Its Sector Peers
| Metric | SCSC Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 10.84 | 33.98 | Better (Cheaper) |
| ROE | 8.14% | 1007.00% | Weak |
| Net Margin | 2.44% | -47797.00% (disorted) | Weak |
| Debt/Equity | 0.13 | 0.44 | Strong (Low Leverage) |
| Current Ratio | 1.96 | 5.66 | Neutral |
| ROA | 4.24% | -287350.00% (disorted) | Weak |
SCSC outperforms its industry in 2 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews ScanSource, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
8.01%
Industry Style: Growth, Innovation, High Beta
GrowingEPS CAGR
140.21%
Industry Style: Growth, Innovation, High Beta
High GrowthFCF CAGR
-46.25%
Industry Style: Growth, Innovation, High Beta
Declining