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Category: Stock Market and IHS Markit
Date: 25 September 2019 Stock Price: $66.42 We take a look at the 3rd quarter earnings release of their 2019 fiscal year of IHS Markit a company that provides critical information, analytics and solutions for various industries that drive economies across the world.
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About IHS Markit
IHS Markit (NYSE: INFO) is a world leader in critical information, analytics and solutions for the major industries and markets that drive economies worldwide. The company delivers next-generation information, analytics and solutions to customers in business, finance and government, improving their operational efficiency and providing deep insights that lead to well-informed, confident decisions. IHS Markit has more than 50,000 business and government customers, including 80 percent of the Fortune Global 500 and the world's leading financial institutions. Headquartered in London, IHS Markit is committed to sustainable, profitable growth.
Overview of IHS Markit's latest earnings report
The numbers we are interested in (for the quarter):
- Revenue: $1.112 billion (up from $1.001 billion from the same quarter of the previous year)
- Revenue increased by 11.1% over the last 12 months
- Total operating expenses: $769.5 million (down from $840.7 million for the same quarter of the previous year)
- Total operating expenses decreased by 8.46% over the last 12 months
- Net income: $40.1 million (down from $104.5 million for the same quarter of the previous year)
- Diluted income per share: $0.10 (down from $0.26 for the same quarter of the previous year)
- Diluted weighted-average shares outstanding: 410.9 million (up from 405.1 million for the same quarter of the previous year)
- Cash and cash equivalents: $124.1 million
- Cash and cash equivalents per share: $0.30
- Cash and cash equivalents makes up 0.45% of IHS Markit's market capital
- Cash and cash equivalents makes up 0.78% of IHS Markit's total assets
- Accounts receivable: $862.7 million
- Accounts receivable makes up 5.42% of IHS Markit's total assets
- Stockholders equity of IHS Markit's: $8.235 billion
- Stockholders equity per share: $20.04
- IHS Markit is trading at 3.31 times its stockholders equity which is within the expected range of between 2 and 4 which most companies tend to trade at.
- Cash generated from operations (for 9 months): $297.1 million
- Cash generated from operations per share for the 9 months: $0.72
IHS Markit's management commentary on the results and earnings guidance
LONDON--(BUSINESS WIRE)--Sep. 24, 2019-- IHS Markit (NYSE: INFO), a world leader in critical information, analytics and solutions, today reported results for the third quarter ended August 31, 2019.
Third Quarter 2019 Operating Performance
Segment results were as follows (additional segment information is included later in this release):
Outlook (forward-looking statement)
For the year ending November 30, 2019, IHS Markit expects:
Third Quarter 2019 Operating Performance
Segment results were as follows (additional segment information is included later in this release):
- Resources. Third quarter revenue for Resources increased $19 million, or 9 percent, to $230 million, with recurring revenue increasing 5 percent organically. Third quarter Adjusted EBITDA for Resources increased $16 million, or 18 percent, to $101 million.
- Transportation. Third quarter revenue for Transportation increased $18 million, or 6 percent, to $315 million, and included 10 percent organic growth for the recurring-based business. Third quarter Adjusted EBITDA for Transportation increased $6 million, or 5 percent, to $134 million.
- Consolidated Markets & Solutions (CMS). Third quarter revenue for CMS increased $1 million, or 1 percent, to $139 million, and had flat organic growth for the recurring-based business. Third quarter Adjusted EBITDA for CMS increased $1 million, or 3 percent, to $31 million.
- Financial Services. Third quarter revenue for Financial Services increased $74 million, or 21 percent, to $429 million, and included 6 percent total organic growth. Third quarter Adjusted EBITDA for Financial Services increased $43 million, or 27 percent, to $199 million.
Outlook (forward-looking statement)
For the year ending November 30, 2019, IHS Markit expects:
- Revenue in a range of $4.40 billion to $4.42 billion, including total organic growth of 5 percent to 6 percent including Ipreo for the 4 month stub period;
- Adjusted EBITDA trending above the mid-point of the prior guidance range of $1.75 billion to $1.78 billion; and
- Adjusted EPS at the high end of the prior guidance range of $2.52 to $2.57 per diluted share.
IHS Markit (NYSE: INFO) stock price history
The image below, obtained from Google, shows the stock price history of IHS Markit (NYSE: INFO) over the last 5 year. And it's been a a very good time for IHS Markit stockholders. 5 years ago the stock of Jabil was trading at $23.70 a stock, and its currently it's trading at $66.53. Thats a very strong return of 180% provided over the last 5 years. The stock is also trading at a lot closer to its 52 week high of $68.86 than it is to its 52 week low of $44.52 which to us is a clear indication that the short term sentiment and momentum of the stock is very positive.
Recent coverage of IHS Markit (INFO)
The extract below, obtained from Zacks discusses IHS Markit's recent earnings report.
IHS Markit Ltd. (INFO - Free Report) reported mixed third-quarter fiscal 2019 results with earnings beating the Zacks Consensus Estimate but revenues missing the same. Adjusted earnings per share of 67 cents beat the consensus mark by 4 cents and increased 16% on a year-over-year basis. Total revenues came in at $1.11 billion, missing the consensus mark by $16 million but improving 11% from the year-ago quarter. We observe that shares of IHS Markit have gained 23.3% over the past year, outperforming 19% rally of the industry it belongs to.
Read the original article here
IHS Markit Ltd. (INFO - Free Report) reported mixed third-quarter fiscal 2019 results with earnings beating the Zacks Consensus Estimate but revenues missing the same. Adjusted earnings per share of 67 cents beat the consensus mark by 4 cents and increased 16% on a year-over-year basis. Total revenues came in at $1.11 billion, missing the consensus mark by $16 million but improving 11% from the year-ago quarter. We observe that shares of IHS Markit have gained 23.3% over the past year, outperforming 19% rally of the industry it belongs to.
Read the original article here
IHS Markit (NYSE: INFO) latest stock valuation
So based on the earnings report of IHS Markit (NYSE: INFO) and the latest earnings guidance provided what do we value IHS Markit (INFO) stock at? Based on their latest earnings report our target (full value) price for IHS Markit at $55 a stock. We therefore believe the stock of IHS Markit is overvalued
We usually suggest long term fundamental and value investors look to enter the stock at least 10% below our target price, which in this case is $55 Therefore we believe the a good entry point into the stock is below $49.50. We believe the stock of IHS Markit will pull back from current levels to levels closer to our valuation levels in coming weeks and months. While top line revenue growth is strong for the group, its the bottom line earnings that needs to grow to. This is not currently the case and it therefore negatively affected our valuation of IHS Markit
We usually suggest long term fundamental and value investors look to enter the stock at least 10% below our target price, which in this case is $55 Therefore we believe the a good entry point into the stock is below $49.50. We believe the stock of IHS Markit will pull back from current levels to levels closer to our valuation levels in coming weeks and months. While top line revenue growth is strong for the group, its the bottom line earnings that needs to grow to. This is not currently the case and it therefore negatively affected our valuation of IHS Markit