Servcorp Limited
Servcorp Limited Fundamental Analysis
Servcorp Limited (SRV.AX) shows strong financial fundamentals with a PE ratio of 11.67, profit margin of 15.71%, and ROE of 23.89%. The company generates $0.4B in annual revenue with moderate year-over-year growth of 7.31%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 51.8/100 based on profitability, valuation, growth, and balance sheet metrics. The C grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze SRV.AX's fundamental strength across five key dimensions:
Efficiency Score
WeakSRV.AX struggles to generate sufficient returns from assets.
Valuation Score
ExcellentSRV.AX trades at attractive valuation levels.
Growth Score
ModerateSRV.AX shows steady but slowing expansion.
Financial Health Score
ModerateSRV.AX shows balanced financial health with some risks.
Profitability Score
ExcellentSRV.AX achieves industry-leading margins.
Key Financial Metrics
Is SRV.AX Expensive or Cheap?
P/E Ratio
SRV.AX trades at 11.67 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, SRV.AX's PEG of 1.24 indicates fair valuation.
Price to Book
The market values Servcorp Limited at 2.70 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 1.00 times EBITDA. This is generally considered low.
How Well Does SRV.AX Make Money?
Net Profit Margin
For every $100 in sales, Servcorp Limited keeps $15.71 as profit after all expenses.
Operating Margin
Core operations generate 55.21 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $23.89 in profit for every $100 of shareholder equity.
ROA
Servcorp Limited generates $7.91 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Servcorp Limited generates strong operating cash flow of $191.13M, reflecting robust business health.
Free Cash Flow
Servcorp Limited generates strong free cash flow of $179.92M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $1.80 in free cash annually.
FCF Yield
SRV.AX converts 26.46% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
11.67
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
1.24
vs 25 benchmark
P/B Ratio
Price to book value ratio
2.70
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.84
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
2.43
vs 25 benchmark
Current Ratio
Current assets to current liabilities
2.14
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.24
vs 25 benchmark
ROA
Return on assets percentage
0.08
vs 25 benchmark
ROCE
Return on capital employed
0.32
vs 25 benchmark
How SRV.AX Stacks Against Its Sector Peers
| Metric | SRV.AX Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 11.67 | 22.46 | Better (Cheaper) |
| ROE | 23.89% | 681.00% | Weak |
| Net Margin | 15.71% | -37308.00% (disorted) | Strong |
| Debt/Equity | 2.43 | -20.87 (disorted) | Distorted |
| Current Ratio | 2.14 | 1953.63 | Strong Liquidity |
| ROA | 7.91% | -1226.00% (disorted) | Weak |
SRV.AX 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 Servcorp Limited's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
-7.24%
Industry Style: Income, Inflation Hedge, REIT
DecliningEPS CAGR
616.24%
Industry Style: Income, Inflation Hedge, REIT
High GrowthFCF CAGR
220.65%
Industry Style: Income, Inflation Hedge, REIT
High Growth