Steel Connect, Inc.
Steel Connect, Inc. Fundamental Analysis
Steel Connect, Inc. (STCN) shows strong financial fundamentals with a PE ratio of 0.88, profit margin of 49.31%, and ROE of 24.59%. The company generates $0.2B in annual revenue with weak year-over-year growth of -7.92%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 60.5/100 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 STCN's fundamental strength across five key dimensions:
Efficiency Score
ExcellentSTCN demonstrates superior asset utilization.
Valuation Score
ExcellentSTCN trades at attractive valuation levels.
Growth Score
ModerateSTCN shows steady but slowing expansion.
Financial Health Score
ExcellentSTCN maintains a strong and stable balance sheet.
Profitability Score
ExcellentSTCN achieves industry-leading margins.
Key Financial Metrics
Is STCN Expensive or Cheap?
P/E Ratio
STCN trades at 0.88 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, STCN's PEG of 0.88 indicates potential undervaluation.
Price to Book
The market values Steel Connect, Inc. at 0.19 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 10.68 times EBITDA. This signals the market has high growth expectations.
How Well Does STCN Make Money?
Net Profit Margin
For every $100 in sales, Steel Connect, Inc. keeps $49.31 as profit after all expenses.
Operating Margin
Core operations generate 4.29 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $24.59 in profit for every $100 of shareholder equity.
ROA
Steel Connect, Inc. generates $17.68 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Steel Connect, Inc. produces operating cash flow of $22.26M, showing steady but balanced cash generation.
Free Cash Flow
Steel Connect, Inc. generates strong free cash flow of $18.22M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $2.88 in free cash annually.
FCF Yield
STCN converts 23.17% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
0.88
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.88
vs 25 benchmark
P/B Ratio
Price to book value ratio
0.19
vs 25 benchmark
P/S Ratio
Price to sales ratio
0.44
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.09
vs 25 benchmark
Current Ratio
Current assets to current liabilities
3.94
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.25
vs 25 benchmark
ROA
Return on assets percentage
0.18
vs 25 benchmark
ROCE
Return on capital employed
0.02
vs 25 benchmark
How STCN Stacks Against Its Sector Peers
| Metric | STCN Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 0.88 | 21.28 | Better (Cheaper) |
| ROE | 24.59% | 1116.00% | Weak |
| Net Margin | 49.31% | -55491.00% (disorted) | Strong |
| Debt/Equity | 0.09 | 1.38 | Strong (Low Leverage) |
| Current Ratio | 3.94 | 1.61 | Strong Liquidity |
| ROA | 17.68% | -204827.00% (disorted) | Strong |
STCN outperforms its industry in 5 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Steel Connect, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
-77.61%
Industry Style: Growth, Technology, Streaming
DecliningEPS CAGR
235.54%
Industry Style: Growth, Technology, Streaming
High GrowthFCF CAGR
10.47%
Industry Style: Growth, Technology, Streaming
High Growth