Locaweb Serviços de Internet (BOVESPA:LWSA3) - Share price, News & Analysis

LWSA3 fundamental analysis
Snowflake Score
Valuation	3/6
Future Growth	4/6
Past Performance	0/6
Financial Health	6/6
Dividends	0/6

LWSA3 Stock Overview

Locaweb Serviços de Internet S.A. offers hosting and cloud services in Brazil.

Rewards

Trading at 37.3% below our estimate of its fair value

Earnings are forecast to grow 46.52% per year

Risk Analysis

Highly volatile share price over the past 3 months

Locaweb Serviços de Internet Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Locaweb Serviços de Internet
Historical stock prices
Current Share Price	R$6.73
52 Week High	R$28.35
52 Week Low	R$4.91
Beta	2.32
1 Month Change	-14.81%
3 Month Change	-33.50%
1 Year Change	-72.73%
3 Year Change	n/a
5 Year Change	n/a
Change since IPO	30.68%

Recent News & Updates

Mar 08

Here's What's Concerning About Locaweb Serviços de Internet's (BVMF:LWSA3) Returns On Capital

If you're looking for a multi-bagger, there's a few things to keep an eye out for. Typically, we'll want to notice a...

Shareholder Returns

	LWSA3	BR IT	BR Market
7D	27.2%	14.5%	1.7%
1Y	-72.7%	-44.9%	-19.1%

Return vs Industry: LWSA3 underperformed the BR IT industry which returned -43.6% over the past year.

Return vs Market: LWSA3 underperformed the BR Market which returned -19.5% over the past year.

Price Volatility

Is LWSA3's price volatile compared to industry and market?
LWSA3 volatility
LWSA3 Average Weekly Movement	11.7%
IT Industry Average Movement	6.8%
Market Average Movement	6.4%
10% most volatile stocks in BR Market	9.8%
10% least volatile stocks in BR Market	2.9%

Stable Share Price: LWSA3 is more volatile than 90% of BR stocks over the past 3 months, typically moving +/- 12% a week.

Volatility Over Time: LWSA3's weekly volatility (12%) has been stable over the past year, but is still higher than 75% of BR stocks.

About the Company

Founded	Employees	CEO	Website
1997	n/a	Fernando Biancardi Cirne	https://www.locaweb.com.br

Locaweb Serviços de Internet S.A. offers hosting and cloud services in Brazil. The company operates in two segments, Be Online and Software as a Service (BeOnline & SaaS), and Commerce. It offers data transmission, voice, and images and sound services; gateway electronic payments; data center solutions; and internet and website hosting services, corporate e-mail solutions, domain registration, etc. The company also provides solutions for receiving online payments to small and large businesses; solutions based on the SaaS model for virtual stores; SaaS delivery and management solutions for restaurants; digital management and marketing solution for social media networks; and multichannel integration platform for retail operations.

Locaweb Serviços de Internet Fundamentals Summary

How do Locaweb Serviços de Internet's earnings and revenue compare to its market cap?
LWSA3 fundamental statistics
Market Cap	R$3.95b
Earnings (TTM)	-R$2.84m
Revenue (TTM)	R$888.07m

4.5x

P/S Ratio

-1,393x

P/E Ratio

Is LWSA3 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
LWSA3 income statement (TTM)
Revenue	R$888.07m
Cost of Revenue	R$483.94m
Gross Profit	R$404.13m
Other Expenses	R$406.97m
Earnings	-R$2.84m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

Aug 10, 2022

Earnings per share (EPS)	-0.0048
Gross Margin	45.51%
Net Profit Margin	-0.32%
Debt/Equity Ratio	0.4%

How did LWSA3 perform over the long term?

See historical performance and comparison

Dividends

0.4%

Current Dividend Yield

-620%

Payout Ratio

Valuation

Is Locaweb Serviços de Internet undervalued compared to its fair value and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

Below Fair Value
Significantly Below Fair Value
PE vs Industry
PE vs Market
PEG Ratio
PB vs Industry

37.3%

Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: LWSA3 (R$6.73) is trading below our estimate of fair value (R$10.73)

Significantly Below Fair Value: LWSA3 is trading below fair value by more than 20%.

Price To Earnings Ratio

PE vs Industry: LWSA3 is unprofitable, so we can't compare its PE Ratio to the South American IT industry average.

PE vs Market: LWSA3 is unprofitable, so we can't compare its PE Ratio to the BR market.

Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate LWSA3's PEG Ratio to determine if it is good value.

Price to Book Ratio

PB vs Industry: LWSA3 is good value based on its PB Ratio (1.3x) compared to the XS IT industry average (1.6x).

Future Growth

How is Locaweb Serviços de Internet forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

Future Growth Score

4/6

Future Growth Score 4/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

46.5%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: LWSA3 is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (9.1%).

Earnings vs Market: LWSA3 is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: LWSA3's is expected to become profitable in the next 3 years.

Revenue vs Market: LWSA3's revenue (19.3% per year) is forecast to grow faster than the BR market (6.1% per year).

High Growth Revenue: LWSA3's revenue (19.3% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: LWSA3's Return on Equity is forecast to be low in 3 years time (5.1%).

Past Performance

How has Locaweb Serviços de Internet performed over the past 5 years?

Past Performance Score

0/6

Past Performance Score 0/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-28.8%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: LWSA3 is currently unprofitable.

Growing Profit Margin: LWSA3 is currently unprofitable.

Past Earnings Growth Analysis

Earnings Trend: LWSA3 is unprofitable, and losses have increased over the past 5 years at a rate of 28.8% per year.

Accelerating Growth: Unable to compare LWSA3's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: LWSA3 is unprofitable, making it difficult to compare its past year earnings growth to the IT industry (93.4%).

Return on Equity

High ROE: LWSA3 has a negative Return on Equity (-0.096%), as it is currently unprofitable.

Financial Health

How is Locaweb Serviços de Internet's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: LWSA3's short term assets (R$2.2B) exceed its short term liabilities (R$798.3M).

Long Term Liabilities: LWSA3's short term assets (R$2.2B) exceed its long term liabilities (R$884.0M).

Debt to Equity History and Analysis

Debt Level: LWSA3 has more cash than its total debt.

Reducing Debt: LWSA3's debt to equity ratio has reduced from 178.2% to 0.4% over the past 5 years.

Debt Coverage: LWSA3's debt is well covered by operating cash flow (1281.8%).

Interest Coverage: LWSA3 earns more interest than it pays, so coverage of interest payments is not a concern.

Balance Sheet

Dividend

What is Locaweb Serviços de Internet current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

0.44%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: LWSA3's dividend (0.45%) isn’t notable compared to the bottom 25% of dividend payers in the BR market (1.38%).

High Dividend: LWSA3's dividend (0.45%) is low compared to the top 25% of dividend payers in the BR market (6.55%).

Stability and Growth of Payments

Stable Dividend: LWSA3 is not paying a notable dividend for the BR market, therefore no need to check if payments are stable.

Growing Dividend: LWSA3 is not paying a notable dividend for the BR market, therefore no need to check if payments are increasing.

Earnings Payout to Shareholders

Earnings Coverage: LWSA3 is not paying a notable dividend for the BR market.

Cash Payout to Shareholders

Cash Flow Coverage: LWSA3 is not paying a notable dividend for the BR market.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

CEO

Fernando Biancardi Cirne

4.17yrs

Tenure

Mr. Fernando Biancardi Cirne serves as Chief Executive Officer at Locaweb Serviços de Internet S.A. since March 2018. He holds a bachelor’s degree in Engineering from the University of São Paulo and an MBA...

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/05/24 00:00
End of Day Share Price	2022/05/23 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31