BGC Group, Inc. (NASDAQ: BGC)

Sector: Financial Services Industry: Capital Markets CIK: 0001094831
Market Cap 4.39 Bn
P/B 4.55
P/E 26.50
P/S 1.59
ROIC (Qtr) 7.94
Div Yield % 1.11
Rev 1y % (Qtr) 31.32
Total Debt (Qtr) 1.84 Bn
Debt/Equity (Qtr) 1.90

About

Price action

Investment thesis

Bull case

  • Robust free cash flow of 400.23M exceeds capital expenditure of 65.60M by 6.10x, indicating strong organic growth funding capability.
  • Strong tangible asset base of 4.74B provides 2.58x coverage of total debt 1.84B, indicating robust asset backing and low credit risk.
  • Free cash flow of 400.23M provides solid 1.21x coverage of operating expenses 330.71M, showing operational efficiency.
  • Operating cash flow of 465.83M provides strong 7.10x coverage of capital expenditure 65.60M, enabling organic growth.
  • Strong tangible asset base of 4.74B provides 4.37x coverage of intangibles 1.08B, indicating robust asset quality.

Bear case

  • Operating cash flow of 465.83M barely covers its investment activities of (209.85M), with a coverage ratio of -2.22, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 465.83M provides thin coverage of dividend payments of (39.06M) with a -11.93 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 799.20M provide limited coverage of acquisition spending of (297.53M), which is -2.69x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • The company's operating cash flow of 465.83M shows concerning coverage of stock compensation expenses of 355.40M, with a 1.31 ratio indicating potential earnings quality issues.
  • Operating cash flow of 465.83M is outpaced by equity issuance of (390.48M) (-1.19 ratio), indicating concerning reliance on equity markets for funding operations.

Peer comparison

Companies in the Capital Markets
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 GS Goldman Sachs Group Inc 284.23 Bn 17.94 4.84 911.32 Bn
2 MS Morgan Stanley 279.63 Bn 17.97 4.05 353.12 Bn
3 SCHW Schwab Charles Corp 179.33 Bn 23.09 7.83 27.59 Bn
4 HOOD Robinhood Markets, Inc. 106.92 Bn 48.73 25.43 0.00 Bn
5 CRCL Circle Internet Group, Inc. 40.97 Bn 261.00 24.22 0.15 Bn
6 IBKR Interactive Brokers Group, Inc. 28.23 Bn 30.79 4.75 28.43 Bn
7 LPLA LPL Financial Holdings Inc. 27.60 Bn 33.13 1.77 7.52 Bn
8 FUTU Futu Holdings Ltd 22.89 Bn 18.13 8.54 1.75 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.94 1.07
EV to Cash from Ops. EV/CFO 11.74 15.33
EV to Debt EV to Debt 2.98 21.89
EV to EBIT EV/EBIT 16.12 -0.80
EV to EBITDA EV/EBITDA 14.39 11.20
EV to Free Cash Flow [EV/FCF] EV/FCF 13.67 43.08
EV to Market Cap EV to Market Cap 1.24 -0.05
EV to Revenue EV/Rev 1.98 12.82
Price to Book Value [P/B] P/B 4.55 3.09
Price to Earnings [P/E] P/E 26.50 6.20
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 4.24 4.22
Dividend Payout Ratio % Div Payout % (Qtr) 23.50 10.37
Dividend per Basic Share Div per Share (Qtr) 0.08 0.70
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 9.49 -8.68
Interest Coverage Int. cover (Qtr) 2.91 37.53
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 8.35 -12,429.64
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 36.97 1,588.78
Dividend Growth (1y) % Div 1y % (Qtr) 33.33 4.88
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 39.14 270.93
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 36.99 333.57
EBIT Growth (1y) % EBIT 1y % (Qtr) 27.54 3,103.22
EBT Growth (1y) % EBT 1y % (Qtr) 24.84 3,039.53
EPS Growth (1y) % EPS 1y % (Qtr) 36.00 24.25
FCF Growth (1y) % FCF 1y % (Qtr) 141.99 -80.08
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 24.93 51.33
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.47 0.42
Cash Payout Ratio Cash Payout (Qtr) 0.07 -0.08
Cash Ratio Cash Ratio 0.00 2.01
Current Ratio Current Ratio 0.00 3.47
Debt to Equity Ratio Debt/Equity (Qtr) 1.90 1.46
Interest Cover Ratio Int Coverage (Qtr) 2.91 37.53
Times Interest Earned Times Interest Earned (Qtr) 2.91 37.53
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 15.80 76.68
EBIT Margin % EBIT Margin % (Qtr) 12.30 46.81
EBT Margin % EBT Margin % (Qtr) 8.08 58.57
Gross Margin % Gross Margin % (Qtr) 100.00 53.60
Net Profit Margin % Net Margin % (Qtr) 6.00 29.41