D-MARKET Electronic Services & Trading (NASDAQ: HEPS)

Sector: Consumer Cyclical Industry: Internet Retail CIK: 0001850235
Market Cap 899.22 Mn
P/B 43.38
P/E -12.17
P/S 0.54
ROIC (Qtr) -875.51
Div Yield % 0.00
Rev 1y % (Qtr) -0.17
Total Debt (Qtr) 66.80 Mn
Debt/Equity (Qtr) 3.22

About

D-MARKET Electronic Services & Trading, known as Hepsiburada, is a Turkish e-commerce company that operates primarily under its Hepsiburada brand name. The company was established in 2000 and is listed on the Nasdaq Global Select Market under the ticker symbol HEPS. Hepsiburada is one of the leading e-commerce platforms in Turkey, with over 63 million members, 11.9 million active customers, and approximately 101.5 thousand active merchants. Hepsiburada's primary business activities involve operating an e-commerce platform that offers a wide range...

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Price action

Investment thesis

Bull case

  • Strong operating cash flow of 221.01M provides robust 3.31x coverage of total debt 66.80M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 182.04M provide 3.76x coverage of short-term debt 48.40M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 693.72M provides 10.38x coverage of total debt 66.80M, indicating robust asset backing and low credit risk.
  • Robust free cash flow of 163.44M exceeds capital expenditure of 57.58M by 2.84x, indicating strong organic growth funding capability.
  • Tangible assets of 693.72M provide exceptional 12.24x coverage of deferred revenue 56.67M, showing strong service capability backing.

Bear case

  • The company's operating cash flow of 221.01M shows concerning coverage of stock compensation expenses of (8.37M), with a -26.40 ratio indicating potential earnings quality issues.
  • Operating earnings of 158.19M show weak coverage of depreciation charges of 70.48M, with a 2.24 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of 163.44M represents just -0.64x of debt issuance (254.07M), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • High financing cash flow of (254.07M) relative to working capital of (112.65M), which is 2.26x suggests concerning dependence on external funding for operational needs.
  • Debt issuance of (254.07M) significantly exceeds working capital of (112.65M), which is 2.26x, indicating potentially unsustainable leverage for operational funding.

Peer comparison

Companies in the Internet Retail
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 AMZN Amazon Com Inc 2,526.56 Bn 33.03 3.65 135.42 Bn
2 BABA Alibaba Group Holding Ltd 395.87 Bn 22.47 2.79 39.55 Bn
3 PDD PDD Holdings Inc. 149.89 Bn 10.44 2.55 1.50 Bn
4 MELI Mercadolibre Inc 106.40 Bn 51.23 4.06 9.88 Bn
5 DASH DoorDash, Inc. 88.88 Bn 103.00 7.03 3.26 Bn
6 SE Sea Ltd 73.28 Bn 51.67 3.48 4.24 Bn
7 EBAY Ebay Inc 64.91 Bn 5.04 6.46 7.02 Bn
8 JD JD.com, Inc. 42.35 Bn 9.36 0.23 15.74 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.07 1.64
EV to Cash from Ops. EV/CFO 0.24 10.76
EV to Debt EV to Debt 0.79 18.39
EV to EBIT EV/EBIT 0.33 20.59
EV to EBITDA EV/EBITDA 1.11 20.75
EV to Free Cash Flow [EV/FCF] EV/FCF 0.32 16.58
EV to Market Cap EV to Market Cap 0.06 -3.15
EV to Revenue EV/Rev 0.03 -4.05
Price to Book Value [P/B] P/B 43.38 5.50
Price to Earnings [P/E] P/E -12.17 36.85
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -93.84
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 -203.90
Dividend per Basic Share Div per Share (Qtr) 0.00 0.08
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 -3.46
Interest Coverage Int. cover (Qtr) 0.68 -1,581.43
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 14.52 -39.45
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 41.55 53.91
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 1.00
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -11.61 37.93
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -18.36 -62.59
EBIT Growth (1y) % EBIT 1y % (Qtr) -11.61 8.33
EBT Growth (1y) % EBT 1y % (Qtr) -23.21 -10.66
EPS Growth (1y) % EPS 1y % (Qtr) -19.52 13.44
FCF Growth (1y) % FCF 1y % (Qtr) -20.49 -46.02
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -3.95 23.19
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.05 1.17
Cash Payout Ratio Cash Payout (Qtr) 0.00 -0.04
Cash Ratio Cash Ratio (Qtr) 0.25 2.14
Current Ratio Curr Ratio (Qtr) 0.85 3.56
Debt to Equity Ratio Debt/Equity (Qtr) 3.22 0.52
Interest Cover Ratio Int Coverage (Qtr) 0.68 -1,581.43
Times Interest Earned Times Interest Earned (Qtr) 0.68 -1,581.43
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 13.70 4.40
EBIT Margin % EBIT Margin % (Qtr) 395.45 -36.99
EBT Margin % EBT Margin % (Qtr) -4.44 -40.80
Gross Margin % Gross Margin % (Qtr) 18.30 44.74
Net Profit Margin % Net Margin % (Qtr) -4.40 -40.62