Serco Group plc
Serco Group plc Fundamental Analysis
Serco Group plc (SECCF) shows weak financial fundamentals with a PE ratio of 55.64, profit margin of 1.00%, and ROE of 5.67%. The company generates $4.7B in annual revenue with weak year-over-year growth of -1.77%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 18.8/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze SECCF's fundamental strength across five key dimensions:
Efficiency Score
WeakSECCF struggles to generate sufficient returns from assets.
Valuation Score
WeakSECCF trades at a premium to fair value.
Growth Score
WeakSECCF faces weak or negative growth trends.
Financial Health Score
WeakSECCF carries high financial risk with limited liquidity.
Profitability Score
WeakSECCF struggles to sustain strong margins.
Key Financial Metrics
Is SECCF Expensive or Cheap?
P/E Ratio
SECCF trades at 55.64 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, SECCF's PEG of 2.73 indicates potential overvaluation.
Price to Book
The market values Serco Group plc at 3.10 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 6.71 times EBITDA. This is generally considered low.
How Well Does SECCF Make Money?
Net Profit Margin
For every $100 in sales, Serco Group plc keeps $1.00 as profit after all expenses.
Operating Margin
Core operations generate 2.73 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $5.67 in profit for every $100 of shareholder equity.
ROA
Serco Group plc generates $1.71 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Serco Group plc generates limited operating cash flow of $408.13M, signaling weaker underlying cash strength.
Free Cash Flow
Serco Group plc produces free cash flow of $377.40M, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $0.38 in free cash annually.
FCF Yield
SECCF converts 15.14% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
55.64
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
2.73
vs 25 benchmark
P/B Ratio
Price to book value ratio
3.10
vs 25 benchmark
P/S Ratio
Price to sales ratio
0.54
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
1.10
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.91
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.06
vs 25 benchmark
ROA
Return on assets percentage
0.02
vs 25 benchmark
ROCE
Return on capital employed
0.07
vs 25 benchmark
How SECCF Stacks Against Its Sector Peers
| Metric | SECCF Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 55.64 | 26.89 | Worse (Expensive) |
| ROE | 5.67% | 1304.00% | Weak |
| Net Margin | 1.00% | -29196.00% (disorted) | Weak |
| Debt/Equity | 1.10 | 0.75 | Weak (High Leverage) |
| Current Ratio | 0.91 | 10.90 | Weak Liquidity |
| ROA | 1.71% | -1543746.00% (disorted) | Weak |
SECCF 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 Serco Group plc's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
63.03%
Industry Style: Cyclical, Value, Infrastructure
High GrowthEPS CAGR
-2.98%
Industry Style: Cyclical, Value, Infrastructure
DecliningFCF CAGR
350.88%
Industry Style: Cyclical, Value, Infrastructure
High Growth