Scientific Games Corporation
Scientific Games Corporation Fundamental Analysis
Scientific Games Corporation (SGMS) shows strong financial fundamentals with a PE ratio of 7.87, profit margin of 15.81%, and ROE of 92.50%. The company generates $4.2B in annual revenue with moderate year-over-year growth of 9.86%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 74.1/100 based on profitability, valuation, growth, and balance sheet metrics. The B grade reflects solid fundamentals with room for improvement in valuation or growth.
Fundamental Health Score
We analyze SGMS's fundamental strength across five key dimensions:
Efficiency Score
WeakSGMS struggles to generate sufficient returns from assets.
Valuation Score
ExcellentSGMS trades at attractive valuation levels.
Growth Score
ModerateSGMS shows steady but slowing expansion.
Financial Health Score
ExcellentSGMS maintains a strong and stable balance sheet.
Profitability Score
ExcellentSGMS achieves industry-leading margins.
Key Financial Metrics
Is SGMS Expensive or Cheap?
P/E Ratio
SGMS trades at 7.87 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, SGMS's PEG of 0.35 indicates potential undervaluation.
Price to Book
The market values Scientific Games Corporation at 6.75 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 11.60 times EBITDA. This signals the market has high growth expectations.
How Well Does SGMS Make Money?
Net Profit Margin
For every $100 in sales, Scientific Games Corporation keeps $15.81 as profit after all expenses.
Operating Margin
Core operations generate 26.29 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $92.50 in profit for every $100 of shareholder equity.
ROA
Scientific Games Corporation generates $9.53 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Scientific Games Corporation produces operating cash flow of $649.99M, showing steady but balanced cash generation.
Free Cash Flow
Scientific Games Corporation produces free cash flow of $215.58M, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $2.37 in free cash annually.
FCF Yield
SGMS converts 3.77% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
7.87
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.35
vs 25 benchmark
P/B Ratio
Price to book value ratio
6.75
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.35
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.11
vs 25 benchmark
Current Ratio
Current assets to current liabilities
2.13
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.93
vs 25 benchmark
ROA
Return on assets percentage
0.10
vs 25 benchmark
ROCE
Return on capital employed
0.18
vs 25 benchmark
How SGMS Stacks Against Its Sector Peers
| Metric | SGMS Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 7.87 | 24.85 | Better (Cheaper) |
| ROE | 92.50% | 1165.00% | Weak |
| Net Margin | 15.81% | 749.00% | Weak |
| Debt/Equity | 0.11 | 0.76 | Strong (Low Leverage) |
| Current Ratio | 2.13 | 9.23 | Strong Liquidity |
| ROA | 9.53% | 1271.00% | Weak |
SGMS outperforms its industry in 3 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Scientific Games Corporation's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
-2.09%
Industry Style: Cyclical, Growth, Discretionary
DecliningEPS CAGR
397.33%
Industry Style: Cyclical, Growth, Discretionary
High GrowthFCF CAGR
20.87%
Industry Style: Cyclical, Growth, Discretionary
High Growth