N-able, Inc. (NYSE: NABL)

Sector: Technology Industry: Information Technology Services CIK: 0001834488
Market Cap 1.64 Bn
P/B 2.01
P/E -251.33
P/S 3.29
ROIC (Qtr) 0.68
Div Yield % 0.00
Rev 1y % (Qtr) 13.11
Total Debt (Qtr) 369.03 Mn
Debt/Equity (Qtr) 0.45

About

N-able, Inc. (NABL), a leading global provider of cloud-based software solutions, operates in the managed service provider (MSP) industry. The company's main business activities involve providing cloud-based software solutions to MSPs, enabling them to deliver services to small and medium-sized enterprises (SMEs). N-able's offerings are designed to support digital transformation and growth for these SMEs. N-able's primary products and services include Remote Monitoring and Management (RMM), Security Solutions, Data Protection as-a-Service, and...

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Price action

Investment thesis

Bull case

  • Healthy cash reserves of 101.44M provide 9.67x coverage of short-term debt 10.49M, demonstrating strong liquidity position and minimal refinancing risk.
  • Tangible assets of 304.21M provide exceptional 14.25x coverage of deferred revenue 21.35M, showing strong service capability backing.
  • Robust free cash flow of 73.05M exceeds capital expenditure of 20.81M by 3.51x, indicating strong organic growth funding capability.
  • Operating cash flow of 93.85M provides strong 4.40x coverage of deferred revenue 21.35M, indicating service delivery capability.
  • Robust tangible asset base of 304.21M provides 7.25x coverage of working capital 41.98M, indicating strong operational backing.

Bear case

  • Operating cash flow of 93.85M barely covers its investment activities of (128.83M), with a coverage ratio of -0.73, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (128.83M) provide weak support for R&D spending of 98.65M, which is -1.31x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Cash reserves of 101.44M provide limited coverage of acquisition spending of (99.69M), which is -1.02x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • The company's operating cash flow of 93.85M shows concerning coverage of stock compensation expenses of 46.92M, with a 2 ratio indicating potential earnings quality issues.
  • Operating earnings of 43.10M show weak coverage of depreciation charges of 40.31M, with a 1.07 ratio indicating high capital intensity and potential reinvestment 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 1.37 1.44
EV to Cash from Ops. EV/CFO 20.39 5.63
EV to Debt EV to Debt 5.19 8.06
EV to EBIT EV/EBIT 44.41 -4.05
EV to EBITDA EV/EBITDA 22.47 -0.52
EV to Free Cash Flow [EV/FCF] EV/FCF 26.20 -1.66
EV to Market Cap EV to Market Cap 1.17 1.35
EV to Revenue EV/Rev 3.85 57.14
Price to Book Value [P/B] P/B 2.01 3.34
Price to Earnings [P/E] P/E -251.33 -5.47
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 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) 1.39 -319.17
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -51.72 -253.62
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -41.85 114.15
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 35.23
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -142.68 -22.49
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -26.03 -25.03
EBIT Growth (1y) % EBIT 1y % (Qtr) -54.43 -82.44
EBT Growth (1y) % EBT 1y % (Qtr) -81.22 97.07
EPS Growth (1y) % EPS 1y % (Qtr) -115.00 147.29
FCF Growth (1y) % FCF 1y % (Qtr) 2.94 -8,638.64
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 1.37 -8.24
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.36 0.78
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.01
Cash Ratio Cash Ratio (Qtr) 0.64 0.66
Current Ratio Curr Ratio (Qtr) 1.27 2.12
Debt to Equity Ratio Debt/Equity (Qtr) 0.45 0.88
Interest Cover Ratio Int Coverage (Qtr) 1.39 -319.17
Times Interest Earned Times Interest Earned (Qtr) 1.39 -319.17
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 16.80 -550.76
EBIT Margin % EBIT Margin % (Qtr) 8.66 -775.74
EBT Margin % EBT Margin % (Qtr) 2.42 -827.89
Gross Margin % Gross Margin % (Qtr) 78.00 24.07
Net Profit Margin % Net Margin % (Qtr) -1.30 -830.34