South Bow Corporation
South Bow Corporation Fundamental Analysis
South Bow Corporation (SOBO) shows moderate financial fundamentals with a PE ratio of 20.17, profit margin of 17.26%, and ROE of 13.21%. The company generates $1.9B in annual revenue with moderate year-over-year growth of 5.74%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 40.4/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze SOBO's fundamental strength across five key dimensions:
Efficiency Score
WeakSOBO struggles to generate sufficient returns from assets.
Valuation Score
ModerateSOBO shows balanced valuation metrics.
Growth Score
ModerateSOBO shows steady but slowing expansion.
Financial Health Score
ModerateSOBO shows balanced financial health with some risks.
Profitability Score
ModerateSOBO maintains healthy but balanced margins.
Key Financial Metrics
Is SOBO Expensive or Cheap?
P/E Ratio
SOBO trades at 20.17 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, SOBO's PEG of 9.07 indicates potential overvaluation.
Price to Book
The market values South Bow Corporation at 3.44 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 2.85 times EBITDA. This is generally considered low.
How Well Does SOBO Make Money?
Net Profit Margin
For every $100 in sales, South Bow Corporation keeps $17.26 as profit after all expenses.
Operating Margin
Core operations generate 31.83 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $13.21 in profit for every $100 of shareholder equity.
ROA
South Bow Corporation generates $3.91 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
South Bow Corporation produces operating cash flow of $347.21M, showing steady but balanced cash generation.
Free Cash Flow
South Bow Corporation generates strong free cash flow of $234.85M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $1.13 in free cash annually.
FCF Yield
SOBO converts 3.62% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
20.17
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
9.07
vs 25 benchmark
P/B Ratio
Price to book value ratio
3.44
vs 25 benchmark
P/S Ratio
Price to sales ratio
3.48
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
2.19
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.36
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.13
vs 25 benchmark
ROA
Return on assets percentage
0.04
vs 25 benchmark
ROCE
Return on capital employed
0.08
vs 25 benchmark
How SOBO Stacks Against Its Sector Peers
| Metric | SOBO Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 20.17 | 20.19 | Neutral |
| ROE | 13.21% | 1019.00% | Weak |
| Net Margin | 17.26% | -44017.00% (disorted) | Strong |
| Debt/Equity | 2.19 | -0.65 (disorted) | Distorted |
| Current Ratio | 1.36 | 4.60 | Neutral |
| ROA | 3.91% | -11655350.00% (disorted) | Weak |
SOBO outperforms its industry in 1 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews South Bow Corporation's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
5.59%
Industry Style: Cyclical, Value, Commodity
GrowingEPS CAGR
-28.61%
Industry Style: Cyclical, Value, Commodity
DecliningFCF CAGR
-32.19%
Industry Style: Cyclical, Value, Commodity
Declining