EVERTEC, Inc. (NYSE: EVTC)

Sector: Technology Industry: Software - Infrastructure CIK: 0001559865
Market Cap 1.93 Bn
P/B 2.90
P/E 13.23
P/S 2.14
ROIC (Qtr) 11.53
Div Yield % 0.50
Rev 1y % (Qtr) 7.93
Total Debt (Qtr) 1.09 Bn
Debt/Equity (Qtr) 1.64

About

Price action

Investment thesis

Bull case

  • Healthy cash reserves of 499.74M provide 18.07x coverage of short-term debt 27.65M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 232.16M provides exceptional 110.55x coverage of minority interest expenses 2.10M, showing strong core operations.
  • Strong operating cash flow of 232.16M provides 1.58x coverage of SG&A expenses 146.64M, showing efficient operational cost management.
  • Robust free cash flow of 145.64M exceeds capital expenditure of 86.52M by 1.68x, indicating strong organic growth funding capability.
  • Tangible assets of 921.55M provide exceptional 18.84x coverage of deferred revenue 48.91M, showing strong service capability backing.

Bear case

  • Operating cash flow of 232.16M barely covers its investment activities of (122.42M), with a coverage ratio of -1.90, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 232.16M provides thin coverage of dividend payments of (12.76M) with a -18.19 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 499.74M provide limited coverage of acquisition spending of (34.03M), which is -14.69x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating earnings of 223.63M show weak coverage of depreciation charges of 119.11M, with a 1.88 ratio indicating high capital intensity and potential reinvestment needs.
  • High depreciation of 119.11M relative to operating cash flow of 232.16M, which is 0.51x suggests significant maintenance capital requirements affecting free cash flow.

Consolidation Items Breakdown of Revenue (2024)

Segments Breakdown of Revenue (2024)

Peer comparison

Companies in the Software - Infrastructure
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 MSFT Microsoft Corp 3,563.59 Bn 33.97 12.13 60.56 Bn
2 ORCL Oracle Corp 561.87 Bn 36.43 9.21 124.39 Bn
3 PLTR Palantir Technologies Inc. 413.65 Bn 377.64 106.17 0.24 Bn
4 PANW Palo Alto Networks Inc 126.45 Bn 113.19 13.23 0.35 Bn
5 CRWD CrowdStrike Holdings, Inc. 116.42 Bn -370.56 25.50 0.82 Bn
6 SNPS Synopsys Inc 86.06 Bn 64.60 12.20 14.29 Bn
7 NET Cloudflare, Inc. 62.78 Bn -609.27 31.18 3.50 Bn
8 FTNT Fortinet, Inc. 60.83 Bn 32.47 9.28 1.00 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.19 2.69
EV to Cash from Ops. EV/CFO 11.06 28.91
EV to Debt EV to Debt 2.35 19.83
EV to EBIT EV/EBIT 11.48 -9.95
EV to EBITDA EV/EBITDA 8.27 6.82
EV to Free Cash Flow [EV/FCF] EV/FCF 17.63 26.09
EV to Market Cap EV to Market Cap 1.33 0.36
EV to Revenue EV/Rev 2.84 -9.34
Price to Book Value [P/B] P/B 2.90 3.88
Price to Earnings [P/E] P/E 13.23 -10.66
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 11.45 -0.30
Dividend Payout Ratio % Div Payout % (Qtr) 8.80 2.71
Dividend per Basic Share Div per Share (Qtr) 0.15 0.10
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 6.59 1.68
Interest Coverage Int. cover (Qtr) 3.31 -14.20
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 16.95 -408.01
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 66.01 226.39
Dividend Growth (1y) % Div 1y % (Qtr) -25.00 -0.28
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 36.52 25.27
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 11.91 47.48
EBIT Growth (1y) % EBIT 1y % (Qtr) 39.12 20.13
EBT Growth (1y) % EBT 1y % (Qtr) 77.15 14.16
EPS Growth (1y) % EPS 1y % (Qtr) 72.73 67.50
FCF Growth (1y) % FCF 1y % (Qtr) 9.00 296.60
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 6.46 46.75
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.42 0.67
Cash Payout Ratio Cash Payout (Qtr) 0.04 0.01
Cash Ratio Cash Ratio (Qtr) 1.95 1.22
Current Ratio Curr Ratio (Qtr) 2.91 2.59
Debt to Equity Ratio Debt/Equity (Qtr) 1.64 -0.96
Interest Cover Ratio Int Coverage (Qtr) 3.31 -14.20
Times Interest Earned Times Interest Earned (Qtr) 3.31 -14.20
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 37.90 -548.16
EBIT Margin % EBIT Margin % (Qtr) 24.76 -199.84
EBT Margin % EBT Margin % (Qtr) 17.27 -607.20
Gross Margin % Gross Margin % (Qtr) 49.80 51.88
Net Profit Margin % Net Margin % (Qtr) 16.20 -610.00