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| Last: 39.72 +0.08 +0.20% |
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| Fundamental Analysis
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Growth |
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Market Growth LT |
F |
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Market Growth ST |
D |
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Rel. Price Strength |
N/A |
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Growth Potential |
F |
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Earnings Momentum |
B- |
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Earnings Surprise |
B- |
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Very Poor Top and Bottom Line Record -
Exelon Corp.'s poor growth record over the short and long term evidence a troubled and uncertain business model.
Compared to full year results published three years before, the company's annual revenue grew 1.7% during its fiscal year ended N/A while year to year quarterly sales decreased 5.4% in its most recently reported quarter.
Its most recent full year net income of $2,495 million represents a decrease of 8.1% compared to the same figure three years before, while quarterly net income jumped 15.6% to $606 million in the most recently reported quarter compared to the same quarter a year ago.
Despite disappointing during its most recent earnings release on January 25, 2012, the stock managed to appreciate by 2% in the days surrounding the announcement.
However, the company is averaging a 3.2% earnings surprise (difference between expected and actual earnings) over its last six reported quarterly figures, which means that up to most recently, it was consistently managing to beat quarterly Wall Street estimates, an important driver of stock price momentum.
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Value
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Capital Structure |
D |
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P/E Analysis |
A- |
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Price/Book Ratio |
A+ |
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Price/Cash Flow Ratio |
A |
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Price/Sales Ratio |
B |
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Market Value |
B+ |
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Acceptable Valuation Indicators -
EXC trades at about 10.6 times earnings per basic share (excluding extraordinary items); this
compares very favorably to the MarketGrader-calculated optimum PE ratio of 19.4, based on
a historical negative EPS growth rate, suggesting the stock is significantly undervalued.
Our optimum PE Analysis assigns each stock the highest possible valuation afforded by its long term EPS growth rate;
this historical growth rate measures the average year-to-year change in earnings per share for the company's last eight quarters (when available).
Due to the company's meager revenue and earnings per share growth, there are no fundamental drivers to positively impact the stock price in the near future.
The stock trades at 0.00 times tangible book value per share (tangible book value is based on the company's common equity minus intangibles such as goodwill); this is an attractive valuation were management to undertake steps in an attempt to unlock the true value of assets on the balance sheet.
It trades also at 5.45 times cash flow per share, a sign that investors are assigning relatively little value to the company's non-cash assets and its earnings potential.
EXC trades favorably at 1.37 times trailing 12-month sales,
a 0.53% discount to the Electric Utilities industry average price to sales ratio of 2.91.
The company's market capitalization of $26,222.10 million is 21.71 times its latest quarterly net income (including depreciation), representing a healthy valuation.
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Profitability
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Asset Utilization |
N/A |
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Capital Utilization |
C |
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Operating Margins |
A- |
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Relative Margins |
A+ |
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Return on Equity |
C |
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Quality of Revenues |
A- |
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Adequate Operating Results -
Exelon Corp. exhibits acceptable operating performance with a weak 17.3% return on equity.
The company's leverage, with long term debt accounting for 45.87% of total capital, seems fair at these levels given the company's return on equity is not very strong.
The balance sheet seems barely acceptable considering the company had $1,488.00 million in cash on hand in the most recent quarter but $13,405.00 million in total debt.
Especially important are EXC's operating margins of 13%, 27.5% higher than the 18.32% Electric Utilities Industry average.
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Cash Flow
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Cash Flow Growth |
A+ |
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EBIDTA Margin |
B+ |
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Debt/Cash Flow Ratio |
A |
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Interest Cov. Capacity |
A+ |
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Economic Value |
B+ |
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Retention Rate |
A+ |
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Strong Cash Position Suggests Healthy Outlook -
EXC displays very robust year-to-year cash flow growth of 71%
and a healthy EBITDA (earnings before interest, taxes, depreciation and amortization) margin of 0%.
Given the company's current capital structure, its ability to service its debt seems very adequate, as suggested by a 2.8 debt to cash flow ratio, with total cash flow for the most recent quarter ended N/A of $1,936 million compared with $1,132 million for the same quarter a year before.
EXC's economic value added is very acceptable based on a low cost of debt and low cost of equity, when compared to a 16.85% return on investment.
The company seems to be trying to boost its meager growth record by aggressively retaining profits, as evidenced by a strong 42.62% average reinvestment rate in the last four quarters.
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