Telos Corp (NASDAQ: TLS)

Sector: Technology Industry: Software - Infrastructure CIK: 0000320121
P/B 3.27
P/E -13.22
P/S 2.71
Market Cap 390.83 Mn
ROIC (Qtr) -24.72
Div Yield % 0.00
Rev 1y % (Qtr) 116.31
Total Debt (Qtr) 8.60 Mn
Debt/Equity (Qtr) 0.07

About

Telos Corporation, also known as TLS, is a Maryland-based company operating in the security industry. It specializes in providing software-based security solutions to empower and protect organizations, catering to the needs of government agencies, commercial businesses, and international customers. The company generates revenue through two reportable segments: Security Solutions and Secure Networks. The Security Solutions segment focuses on cybersecurity, cloud, identity solutions, and secure messaging. Telos offers a range of solutions in this...

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Analysis

Pros

  • Strong operating cash flow of 11.68M provides robust 1.36x coverage of total debt 8.60M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 59.05M provide 26.61x coverage of short-term debt 2.22M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 115.11M provides 13.39x coverage of total debt 8.60M, indicating robust asset backing and low credit risk.
  • Operating cash flow of 11.68M provides exceptional 20.28x coverage of interest expenses 576000, showing strong debt service capability.
  • Tangible assets of 115.11M provide exceptional 8.38x coverage of deferred revenue 13.73M, showing strong service capability backing.

Cons

  • Operating cash flow of 11.68M barely covers its investment activities of (11.48M), with a coverage ratio of -1.02, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (11.48M) provide weak support for R&D spending of 6.39M, which is -1.80x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating cash flow of 11.68M provides insufficient coverage of deferred revenue obligations of 13.73M, which is 0.85x, raising concerns about future service delivery capabilities.
  • High receivables of 20.42M relative to inventory of 3.38M (6.05 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • The company's operating cash flow of 11.68M shows concerning coverage of stock compensation expenses of 31.59M, with a 0.37 ratio indicating potential earnings quality issues.

Peer Comparison

Companies in the Software - Infrastructure
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 MSFT Microsoft Corp 3,542.10 Bn 33.76 12.06 60.56 Bn
2 ORCL Oracle Corp 533.93 Bn 34.61 8.75 124.39 Bn
3 PLTR Palantir Technologies Inc. 437.56 Bn 399.47 112.31 0.24 Bn
4 PANW Palo Alto Networks Inc 125.16 Bn 112.03 13.10 0.35 Bn
5 CRWD CrowdStrike Holdings, Inc. 120.85 Bn -384.67 26.47 0.82 Bn
6 SNPS Synopsys Inc 71.69 Bn 35.89 11.14 15.14 Bn
7 NET Cloudflare, Inc. 67.84 Bn -658.43 33.70 3.50 Bn
8 FTNT Fortinet, Inc. 63.33 Bn 33.80 9.66 1.00 Bn

Industry Comparisons

Current Valuation

Metric Value Industry Percentile
EV to Assets 2.09 2.56
EV to Cash from Ops. 29.35 38.32
EV to Debt 39.89 -11.37
EV to EBIT -11.85 -12.79
EV to EBITDA -16.51 7.72
EV to Free Cash Flow [EV/FCF] 1,656.84 24.22
EV to Market Cap 0.88 0.58
EV to Revenue 2.38 -35.00
Price to Book Value [P/B] 3.27 3.74
Price to Earnings [P/E] -13.22 -18.61

Dividend Metrics

Metric Value Industry Percentile
Dividend Coverage Ratio 0.00 -0.30
Dividend Payout Ratio % 0.00 2.69
Dividend per Basic Share 0.00 0.10
FCF Dividend Payout Ratio % 0.00 1.67
Interest Coverage -50.26 -13.15

Growth Metrics

Metric Value Industry Percentile
Capex Growth (1y) % 9.29 -404.11
Cash and Equivalents Growth (1y) % -15.36 226.02
Dividend Growth (1y) % 0.00 -0.27
EBIAT Growth (1y) % 41.44 31.15
EBITDA Growth (1y) % 50.30 49.02
EBIT Growth (1y) % 41.49 25.85
EBT Growth (1y) % 41.12 17.82
EPS Growth (1y) % 41.43 70.69
FCF Growth (1y) % 100.90 295.45
Gross Profit Growth (1y) % 45.86 49.96

Liquidity Ratios

Metric Value Industry Percentile
Asset Utilization Ratio 0.88 0.68
Cash Payout Ratio 0.00 0.02
Cash Ratio 1.58 1.21
Current Ratio 2.76 2.57
Debt to Equity Ratio 0.07 -0.93
Interest Cover Ratio -50.26 -13.15
Times Interest Earned -50.26 -13.15

Profitability

Metric Value Industry Percentile
EBITDA Margin % -12.80 -544.82
EBIT Margin % -20.05 -197.78
EBT Margin % -20.45 -602.74
Gross Margin % 38.30 52.06
Net Profit Margin % -20.50 -605.52