Vasta Platform Ltd (NASDAQ: VSTA)

Sector: Consumer Defensive Industry: Education & Training Services CIK: 0001792829
P/B 0.44
P/E 4.42
P/S 1.24
Market Cap 400.01 Mn
ROIC (Qtr) 21.77
Div Yield % 0.00
Rev 1y % (Qtr) 15.04
Total Debt (Qtr) 222.33 Mn
Debt/Equity (Qtr) 0.25

About

Vasta Platform Ltd, also known as VSTA, is a prominent education company based in Brazil. The company is dedicated to providing comprehensive educational solutions to private K-12 schools, with the aim of facilitating their digital transformation and enhancing their education systems. Vasta's operations span across various business activities, all of which are centered around the education industry. The company's offerings are not limited to a specific region, as it operates in several countries, with a significant presence in Brazil. The company's...

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Analysis

Pros

  • Operating cash flow of 86.73M provides exceptional 1964.10x coverage of minority interest expenses 44155.84, showing strong core operations.
  • Operating cash flow of 86.73M provides strong 67.26x coverage of stock compensation 1.29M, indicating sustainable incentive practices.
  • Tangible assets of 352.72M provide exceptional 168.60x coverage of deferred revenue 2.09M, showing strong service capability backing.
  • Robust free cash flow of 65.75M exceeds capital expenditure of 20.98M by 3.13x, indicating strong organic growth funding capability.
  • Cash position of 449165.12 provides exceptional 10.17x coverage of minority interest expenses 44155.84, indicating strong liquidity.

Cons

  • Operating cash flow of 86.73M barely covers its investment activities of (39.66M), with a coverage ratio of -2.19, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • With cash reserves of 449165.12 against inventory of 53.44M, the 0.01 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Short-term investments of 72.07M significantly exceed cash reserves of 449165.12, which is 160.45x, indicating potentially excessive yield-seeking behavior at the expense of liquidity.
  • Operating cash flow of 86.73M provides minimal -2.65x coverage of tax expenses of (32.67M), suggesting potential tax planning inefficiencies or unsustainable tax positions.
  • Operating earnings of 104.66M show weak coverage of depreciation charges of 54M, with a 1.94 ratio indicating high capital intensity and potential reinvestment needs.

Peer Comparison

Companies in the Education & Training Services
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 EDU New Oriental Education & Technology Group Inc. 8.16 Bn 22.22 1.64 0.78 Bn
2 TAL TAL Education Group 6.54 Bn 38.28 2.46 0.37 Bn
3 GHC Graham Holdings Co 4.86 Bn 6.64 0.99 1.17 Bn
4 LAUR Laureate Education, Inc. 4.63 Bn 22.74 2.92 0.44 Bn
5 LOPE Grand Canyon Education, Inc. 4.37 Bn 20.69 4.01 0.11 Bn
6 ATGE Adtalem Global Education Inc. 3.46 Bn 13.69 1.89 0.78 Bn
7 MH McGraw Hill, Inc. 2.70 Bn -31.40 1.28 2.88 Bn
8 LRN Stride, Inc. 2.64 Bn 8.35 1.07 0.59 Bn

Industry Comparisons

Current Valuation

Metric Value Industry Percentile
EV to Assets 0.09 0.71
EV to Cash from Ops. 1.32 4.94
EV to Debt 0.52 13.10
EV to EBIT 1.09 118.71
EV to EBITDA 1.04 22.11
EV to Free Cash Flow [EV/FCF] 1.74 6.63
EV to Market Cap 0.29 241,102.97
EV to Revenue 0.36 1.60
Price to Book Value [P/B] 0.44 -5.15
Price to Earnings [P/E] 4.42 -0.21

Dividend Metrics

Metric Value Industry Percentile
Dividend Coverage Ratio 0.00 11.45
Dividend Payout Ratio % 0.00 2.78
Dividend per Basic Share 0.00 0.25
FCF Dividend Payout Ratio % 0.00 1.65
Interest Coverage 2.24 52.76

Growth Metrics

Metric Value Industry Percentile
Capex Growth (1y) % 15.95 -74.24
Cash and Equivalents Growth (1y) % -97.45 17.32
Dividend Growth (1y) % 0.00 0.52
EBIAT Growth (1y) % 383.79 -29.47
EBITDA Growth (1y) % 28.44 -5.90
EBIT Growth (1y) % 174.98 -44.38
EBT Growth (1y) % 562.73 -30.15
EPS Growth (1y) % 905.20 -10.20
FCF Growth (1y) % 99.89 -17.13
Gross Profit Growth (1y) % 9.39 3.64

Liquidity Ratios

Metric Value Industry Percentile
Asset Utilization Ratio 0.05 0.60
Cash Payout Ratio 0.00 0.01
Cash Ratio 0.00 0.70
Current Ratio 1.50 1.58
Debt to Equity Ratio 0.25 0.49
Interest Cover Ratio 2.24 52.76
Times Interest Earned 2.24 52.76

Profitability

Metric Value Industry Percentile
EBITDA Margin % 49.20 -27.12
EBIT Margin % 175.01 -87.43
EBT Margin % 17.97 -45.78
Gross Margin % 60.90 47.97
Net Profit Margin % 28.10 -47.07