SolarWinds Corporation
SolarWinds Corporation Fundamental Analysis
SolarWinds Corporation (SWI) shows moderate financial fundamentals with a PE ratio of 37.11, profit margin of 20.77%, and ROE of 6.17%. The company generates $0.4B in annual revenue with moderate year-over-year growth of 5.03%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 51.0/100 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 SWI's fundamental strength across five key dimensions:
Efficiency Score
WeakSWI struggles to generate sufficient returns from assets.
Valuation Score
ModerateSWI shows balanced valuation metrics.
Growth Score
ExcellentSWI delivers strong and consistent growth momentum.
Financial Health Score
ModerateSWI shows balanced financial health with some risks.
Profitability Score
ModerateSWI maintains healthy but balanced margins.
Key Financial Metrics
Is SWI Expensive or Cheap?
P/E Ratio
SWI trades at 37.11 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, SWI's PEG of 0.20 indicates potential undervaluation.
Price to Book
The market values SolarWinds Corporation at 2.26 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 23.70 times EBITDA. This signals the market has high growth expectations.
How Well Does SWI Make Money?
Net Profit Margin
For every $100 in sales, SolarWinds Corporation keeps $20.77 as profit after all expenses.
Operating Margin
Core operations generate 27.30 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $6.17 in profit for every $100 of shareholder equity.
ROA
SolarWinds Corporation generates $2.69 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
SolarWinds Corporation generates strong operating cash flow of $117.34M, reflecting robust business health.
Free Cash Flow
SolarWinds Corporation generates strong free cash flow of $111.96M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $0.65 in free cash annually.
FCF Yield
SWI converts 3.46% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
37.11
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.20
vs 25 benchmark
P/B Ratio
Price to book value ratio
2.26
vs 25 benchmark
P/S Ratio
Price to sales ratio
7.80
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.04
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.85
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.06
vs 25 benchmark
ROA
Return on assets percentage
0.03
vs 25 benchmark
ROCE
Return on capital employed
0.04
vs 25 benchmark
How SWI Stacks Against Its Sector Peers
| Metric | SWI Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 37.11 | 35.19 | Neutral |
| ROE | 6.17% | 1155.00% | Weak |
| Net Margin | 20.77% | -127067.00% (disorted) | Strong |
| Debt/Equity | 0.04 | 0.41 | Strong (Low Leverage) |
| Current Ratio | 0.85 | 4.71 | Weak Liquidity |
| ROA | 2.69% | -314918.00% (disorted) | Weak |
SWI outperforms its industry in 2 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews SolarWinds Corporation's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
-22.58%
Industry Style: Growth, Innovation, High Beta
DecliningEPS CAGR
443.80%
Industry Style: Growth, Innovation, High Beta
High GrowthFCF CAGR
-43.12%
Industry Style: Growth, Innovation, High Beta
Declining