SBC Medical Group Holdings Inc (NASDAQ: SBC)

Sector: Industrials Industry: Consulting Services CIK: 0001930313
Market Cap 483.97 Mn
P/B 1.95
P/E 11.17
P/S 2.71
ROIC (Qtr) 15.35
Div Yield % 0.00
Rev 1y % (Qtr) -18.33
Total Debt (Qtr) 28.15 Mn
Debt/Equity (Qtr) 0.11
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About

Investment thesis

Bull case

  • Healthy cash reserves of 127.43M provide 15.22x coverage of short-term debt 8.38M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of (34.60M) provides exceptional 3000.50x coverage of minority interest expenses (11531), showing strong core operations.
  • Robust free cash flow of (33.88M) exceeds capital expenditure of (721602) by 46.95x, indicating strong organic growth funding capability.
  • Strong tangible asset base of 293.14M provides 10.41x coverage of total debt 28.15M, indicating robust asset backing and low credit risk.
  • Retained earnings of 226.25M provide full 11.44x coverage of long-term debt 19.78M, indicating strong internal capital position.

Bear case

  • Cash reserves of 127.43M provide limited coverage of acquisition spending of (21.28M), which is -5.99x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • The company's operating cash flow of (34.60M) shows concerning coverage of stock compensation expenses of 215237, with a -160.75 ratio indicating potential earnings quality issues.
  • High receivables of 61.19M relative to inventory of 1.68M (36.48 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • Operating cash flow of (34.60M) provides minimal -1.32x coverage of tax expenses of 26.24M, suggesting potential tax planning inefficiencies or unsustainable tax positions.
  • Free cash flow of (33.88M) represents just -1.35x of debt issuance 25.17M, suggesting concerning reliance on leverage rather than internal cash generation for growth.

Peer comparison

Companies in the Consulting Services
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 VRSK Verisk Analytics, Inc. 28.99 Bn 59.50 10.85 4.89 Bn
2 EFX Equifax Inc 23.01 Bn 48.18 7.65 4.81 Bn
3 BAH Booz Allen Hamilton Holding Corp 9.48 Bn 11.30 0.83 4.14 Bn
4 FCN Fti Consulting, Inc 5.36 Bn 20.13 1.45 0.74 Bn
5 HURN Huron Consulting Group Inc. 2.29 Bn 21.14 1.38 0.65 Bn
6 ICFI ICF International, Inc. 1.43 Bn 22.60 0.96 0.62 Bn
7 CRAI Cra International, Inc. 1.10 Bn 25.41 1.63 0.19 Bn
8 SBC SBC Medical Group Holdings Inc 0.48 Bn 11.17 2.71 0.03 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.08 1.96
EV to Cash from Ops. EV/CFO -10.02 5.36
EV to Debt EV to Debt 12.32 58.47
EV to EBIT EV/EBIT 4.98 18.59
EV to EBITDA EV/EBITDA 5.20 20.71
EV to Free Cash Flow [EV/FCF] EV/FCF -10.24 11.61
EV to Market Cap EV to Market Cap 0.72 -835.88
EV to Revenue EV/Rev 1.94 5.73
Price to Book Value [P/B] P/B 1.95 3.44
Price to Earnings [P/E] P/E 11.17 22.21
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 0.70
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 4.25
Dividend per Basic Share Div per Share (Qtr) 0.00 0.32
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 6.40
Interest Coverage Int. cover (Qtr) 596.15 92.47
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 107.50 -330.08
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -7.25 126.66
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 0.43
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -20.27 -18.91
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -32.48 -12.32
EBIT Growth (1y) % EBIT 1y % (Qtr) -23.45 -132.53
EBT Growth (1y) % EBT 1y % (Qtr) -23.56 -937.51
EPS Growth (1y) % EPS 1y % (Qtr) -29.31 -76.24
FCF Growth (1y) % FCF 1y % (Qtr) -173.36 -11.33
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -20.13 12.14
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.56 0.77
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.09
Cash Ratio Cash Ratio (Qtr) 2.86 2.02
Current Ratio Curr Ratio (Qtr) 5.10 4.88
Debt to Equity Ratio Debt/Equity (Qtr) 0.11 0.55
Interest Cover Ratio Int Coverage (Qtr) 596.15 92.47
Times Interest Earned Times Interest Earned (Qtr) 596.15 92.47
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 43.20 -16.97
EBIT Margin % EBIT Margin % (Qtr) 39.05 -96.24
EBT Margin % EBT Margin % (Qtr) 38.98 -22.60
Gross Margin % Gross Margin % (Qtr) 74.10 54.26
Net Profit Margin % Net Margin % (Qtr) 24.30 -25.32