Clarivate Plc (NYSE: CLVT)

Sector: Technology Industry: Information Technology Services CIK: 0001764046
Market Cap 2.34 Bn
P/B 0.48
P/E -5.91
P/S 0.94
ROIC (Qtr) -0.39
Div Yield % 0.00
Rev 1y % (Qtr) 0.14
Total Debt (Qtr) 4.48 Bn
Debt/Equity (Qtr) 0.91

About

Price action

Investment thesis

Bull case

  • Healthy cash reserves of 318.70M provide 17.04x coverage of short-term debt 18.70M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 609.90M provides strong 10.81x coverage of stock compensation 56.40M, indicating sustainable incentive practices.
  • Cash reserves of 318.70M provide ample 3.08x coverage of acquisition spending 103.60M, enabling strategic growth opportunities.
  • Strong free cash flow of 335.20M provides 3.24x coverage of acquisition spending 103.60M, indicating disciplined M&A strategy.
  • Strong tangible asset base of 1.51B provides 14.59x coverage of acquisition spending 103.60M, enabling strategic growth.

Bear case

  • Operating cash flow of 609.90M barely covers its investment activities of (171.10M), with a coverage ratio of -3.56, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 609.90M provides insufficient coverage of deferred revenue obligations of 872.80M, which is 0.70x, raising concerns about future service delivery capabilities.
  • Operating earnings of (32.20M) show weak coverage of depreciation charges of 754.10M, with a -0.04 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of 335.20M represents just -1.35x of debt issuance (248.80M), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • High financing cash flow of (504.80M) relative to working capital of (198.50M), which is 2.54x suggests concerning dependence on external funding for operational needs.

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 279.99 Bn 35.41 4.28 66.57 Bn
2 ACN Accenture plc 168.17 Bn 22.09 2.38 8.20 Bn
3 INFY Infosys Ltd 74.96 Bn 23.74 3.89 -
4 CTSH Cognizant Technology Solutions Corp 41.45 Bn 19.48 1.99 1.17 Bn
5 FIS Fidelity National Information Services, Inc. 35.21 Bn 231.62 3.36 13.00 Bn
6 WIT Wipro Ltd 29.93 Bn 19.70 2.97 1.95 Bn
7 BR Broadridge Financial Solutions, Inc. 26.38 Bn 28.51 3.74 3.28 Bn
8 LDOS Leidos Holdings, Inc. 23.72 Bn 16.88 1.37 5.23 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.58 1.44
EV to Cash from Ops. EV/CFO 10.76 5.63
EV to Debt EV to Debt 1.47 8.06
EV to EBIT EV/EBIT -203.89 -4.05
EV to EBITDA EV/EBITDA 9.09 -0.52
EV to Free Cash Flow [EV/FCF] EV/FCF 19.59 -1.66
EV to Market Cap EV to Market Cap 2.80 1.35
EV to Revenue EV/Rev 2.62 57.14
Price to Book Value [P/B] P/B 0.48 3.34
Price to Earnings [P/E] P/E -5.91 -5.47
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.00 -0.83
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 0.66
Dividend per Basic Share Div per Share (Qtr) 0.00 0.47
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 6.24
Interest Coverage Int. cover (Qtr) -0.12 -319.17
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -1.44 -253.62
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -17.97 114.15
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 35.23
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 95.77 -22.49
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 358.10 -25.03
EBIT Growth (1y) % EBIT 1y % (Qtr) 96.76 -82.44
EBT Growth (1y) % EBT 1y % (Qtr) 76.51 97.07
EPS Growth (1y) % EPS 1y % (Qtr) 71.21 147.29
FCF Growth (1y) % FCF 1y % (Qtr) -21.20 -8,638.64
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -3.50 -8.24
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.22 0.78
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.01
Cash Ratio Cash Ratio (Qtr) 0.21 0.66
Current Ratio Curr Ratio (Qtr) 0.87 2.12
Debt to Equity Ratio Debt/Equity (Qtr) 0.91 0.88
Interest Cover Ratio Int Coverage (Qtr) -0.12 -319.17
Times Interest Earned Times Interest Earned (Qtr) -0.12 -319.17
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 28.90 -550.76
EBIT Margin % EBIT Margin % (Qtr) -1.29 -775.74
EBT Margin % EBT Margin % (Qtr) -12.05 -827.89
Gross Margin % Gross Margin % (Qtr) 65.80 24.07
Net Profit Margin % Net Margin % (Qtr) -15.80 -830.34