Applied Digital Corp. (NASDAQ: APLD)

Sector: Technology Industry: Information Technology Services CIK: 0001144879
Market Cap 7.93 Bn
P/B 5.47
P/E -62.15
P/S 28.15
ROIC (Qtr) -3.20
Div Yield % 0.00
Rev 1y % (Qtr) 250.05
Total Debt (Qtr) 2.61 Bn
Debt/Equity (Qtr) 1.80
Add ratio to table...

About

Applied Digital Corp., known by its ticker symbol APLD, is a significant player in the technology infrastructure industry. The company specializes in three key areas: artificial intelligence (AI) cloud services, high-performance computing (HPC) datacenter hosting, and crypto datacenter hosting. Applied Digital Corp.'s operations span across various business segments. The AI Cloud Service segment, run through its subsidiary Sai Computing, offers cloud services specifically designed for AI and machine learning applications. The company has recently...

Read more

Investment thesis

Bull case

  • Healthy cash reserves of 2.12B provide 145.58x coverage of short-term debt 14.55M, demonstrating strong liquidity position and minimal refinancing risk.
  • Tangible assets of 5.23B provide exceptional 177.60x coverage of deferred revenue 29.44M, showing strong service capability backing.
  • Operating cash flow of (85.12M) fully covers other non-current liabilities (29.44M) by 2.89x, showing strong long-term stability.
  • Cash position of 2.12B provides exceptional 692.11x coverage of minority interest expenses 3.06M, indicating strong liquidity.
  • Tangible assets of 5.23B provide robust 11.54x coverage of other current liabilities 453.28M, indicating strong asset backing.

Bear case

  • Operating cash flow of (85.12M) barely covers its investment activities of (1.28B), with a coverage ratio of 0.07, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Cash reserves of 2.12B provide limited coverage of acquisition spending of (25M), which is -84.74x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating cash flow of (85.12M) provides insufficient coverage of deferred revenue obligations of 29.44M, which is -2.89x, raising concerns about future service delivery capabilities.
  • The company's operating cash flow of (85.12M) shows concerning coverage of stock compensation expenses of 66.75M, with a -1.28 ratio indicating potential earnings quality issues.
  • Operating cash flow of (85.12M) provides minimal -686.42x coverage of tax expenses of 124000, suggesting potential tax planning inefficiencies or unsustainable tax positions.

Peer comparison

Companies in the Information Technology Services
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 IBM International Business Machines Corp 229.77 Bn 29.79 2.98 66.57 Bn
2 ACN Accenture plc 136.96 Bn 17.99 1.94 8.20 Bn
3 INFY Infosys Ltd 61.29 Bn 19.41 3.18 0.68 Bn
4 CTSH Cognizant Technology Solutions Corp 31.81 Bn 14.26 1.51 1.15 Bn
5 FIS Fidelity National Information Services, Inc. 28.54 Bn -1.17 2.90 13.00 Bn
6 WIT Wipro Ltd 23.98 Bn 16.25 2.37 2.35 Bn
7 LDOS Leidos Holdings, Inc. 20.68 Bn 14.28 1.20 5.24 Bn
8 BR Broadridge Financial Solutions, Inc. 20.38 Bn 19.09 2.84 3.17 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.64 1.23
EV to Cash from Ops. EV/CFO -100.54 3.12
EV to Debt EV to Debt 3.28 3.45
EV to EBIT EV/EBIT -91.45 -4.05
EV to EBITDA EV/EBITDA -199.16 3.57
EV to Free Cash Flow [EV/FCF] EV/FCF -6.50 -2.69
EV to Market Cap EV to Market Cap 1.08 1.54
EV to Revenue EV/Rev 30.37 47.25
Price to Book Value [P/B] P/B 5.47 3.04
Price to Earnings [P/E] P/E -62.15 4.15
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) -25.08 -0.59
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 14.14
Dividend per Basic Share Div per Share (Qtr) 0.00 0.47
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 4.61
Interest Coverage Int. cover (Qtr) -3.25 -318.37
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -308.06 -256.13
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 588.78 128.67
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 6.73
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 61.93 -36.77
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -158.69 -22.62
EBIT Growth (1y) % EBIT 1y % (Qtr) 61.96 -87.06
EBT Growth (1y) % EBT 1y % (Qtr) 54.74 75.53
EPS Growth (1y) % EPS 1y % (Qtr) 68.79 122.99
FCF Growth (1y) % FCF 1y % (Qtr) -209.68 -8,761.26
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 77.55 -4.36
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.05 0.79
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.00
Cash Ratio Cash Ratio (Qtr) 3.76 0.73
Current Ratio Curr Ratio (Qtr) 4.82 2.20
Debt to Equity Ratio Debt/Equity (Qtr) 1.80 0.98
Interest Cover Ratio Int Coverage (Qtr) -3.25 -318.37
Times Interest Earned Times Interest Earned (Qtr) -3.25 -318.37
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -15.50 -369.53
EBIT Margin % EBIT Margin % (Qtr) -33.22 -585.52
EBT Margin % EBT Margin % (Qtr) -43.45 -637.04
Gross Margin % Gross Margin % (Qtr) 16.40 24.60
Net Profit Margin % Net Margin % (Qtr) -45.30 -639.67