TSX:FSV

Stock Analysis Report

Executive Summary

FirstService Corporation, together with its subsidiaries, provides residential property services to residential and commercial customers in the United States and Canada.

Rewards

Earnings are forecast to grow 114.91% per year

Risk Analysis

Interest payments are not well covered by earnings

Shareholders have been diluted in the past year



Snowflake Analysis

High growth potential with worrying balance sheet.


Similar Companies

Share Price & News

How has FirstService's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: FSV has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-2.4%

FSV

-0.05%

CA Real Estate

-0.4%

CA Market


1 Year Return

24.5%

FSV

19.1%

CA Real Estate

10.5%

CA Market

Return vs Industry: FSV exceeded the Canadian Real Estate industry which returned 19.1% over the past year.

Return vs Market: FSV exceeded the Canadian Market which returned 10.5% over the past year.


Shareholder returns

FSVIndustryMarket
7 Day-2.4%-0.05%-0.4%
30 Day5.7%3.3%0.8%
90 Day-8.3%1.3%1.7%
1 Year25.3%24.5%21.4%19.1%14.1%10.5%
3 Year112.2%107.6%56.9%47.0%16.1%5.6%
5 Yearn/a87.6%50.1%41.2%20.4%

Price Volatility Vs. Market

How volatile is FirstService's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is FirstService undervalued compared to its fair value and its price relative to the market?

16.02x

Price to Book (PB) ratio


Share Price vs. Fair Value

Below Fair Value: FSV (CA$124) is trading above our estimate of fair value (CA$94.17)

Significantly Below Fair Value: FSV is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: FSV is unprofitable, so we can't compare its PE Ratio to the Real Estate industry average.

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


Price to Earnings Growth Ratio

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


Price to Book Ratio

PB vs Industry: FSV is overvalued based on its PB Ratio (16x) compared to the CA Real Estate industry average (0.8x).


Next Steps

Future Growth

How is FirstService forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

114.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: FSV is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (1.4%).

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

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

Revenue vs Market: FSV's revenue (12.1% per year) is forecast to grow faster than the Canadian market (4.9% per year).

High Growth Revenue: FSV's revenue (12.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: FSV's Return on Equity is forecast to be high in 3 years time (35.5%)


Next Steps

Past Performance

How has FirstService performed over the past 5 years?

-34.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: FSV is currently unprofitable.

Growing Profit Margin: FSV is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: FSV is unprofitable, and losses have increased over the past 5 years at a rate of -34.1% per year.

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

Earnings vs Industry: FSV is unprofitable, making it difficult to compare its past year earnings growth to the Real Estate industry (-29%).


Return on Equity

High ROE: FSV has a negative Return on Equity (-57.2%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is FirstService's financial position?


Financial Position Analysis

Short Term Liabilities: FSV's short term assets ($643.5M) exceed its short term liabilities ($337.0M).

Long Term Liabilities: FSV's short term assets ($643.5M) do not cover its long term liabilities ($1.2B).


Debt to Equity History and Analysis

Debt Level: FSV's debt to equity ratio (242.9%) is considered high.

Reducing Debt: FSV's debt to equity ratio has increased from 97.4% to 242.9% over the past 5 years.

Debt Coverage: FSV's debt is not well covered by operating cash flow (8.8%).

Interest Coverage: FSV is unprofitable, therefore interest payments are not well covered by earnings.


Balance Sheet

Inventory Level: FSV has a low level of unsold assets or inventory.

Debt Coverage by Assets: FSV's debt is not covered by short term assets (assets are 0.7x debt).


Next Steps

Dividend

What is FirstService's current dividend yield, its reliability and sustainability?

0.64%

Current Dividend Yield


Dividend Yield vs Market

company0.6%marketbottom25%2.0%markettop25%5.7%industryaverage2.0%forecastin3Years0.7%

Current dividend yield vs market & industry

Notable Dividend: FSV's dividend (0.64%) isn’t notable compared to the bottom 25% of dividend payers in the Canadian market (2.02%).

High Dividend: FSV's dividend (0.64%) is low compared to the top 25% of dividend payers in the Canadian market (5.68%).


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: FSV is not paying a notable dividend for the Canadian market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of FSV's dividend in 3 years as they are not forecast to pay a notable one for the Canadian market.


Next Steps

Management

What is the CEO of FirstService's salary, the management and board of directors tenure and is there insider trading?

4.5yrs

Average management tenure


CEO

D. Patterson (58yo)

4.5yrs

Tenure

US$3,989,600

Compensation

Mr. D. Scott Patterson has been the Chief Executive Officer of FirstService Corporation since June 1, 2015 and served as its President and Chief Operating Officer from 2003 to 2015. Mr. Patterson is respon ...


CEO Compensation Analysis

Compensation vs Market: D.'s total compensation ($USD3.99M) is above average for companies of similar size in the Canadian market ($USD2.87M).

Compensation vs Earnings: D.'s compensation has increased whilst the company is unprofitable.


Management Age and Tenure

4.5yrs

Average Tenure

58yo

Average Age

Experienced Management: FSV's management team is considered experienced (4.5 years average tenure).


Board Age and Tenure

4.5yrs

Average Tenure

64.5yo

Average Age

Experienced Board: FSV's board of directors are considered experienced (4.5 years average tenure).


Insider Trading

Insider Buying: FSV insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUS$54,18930 Sep 19
Erin Wallace
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares400
Max PriceUS$135.47
SellUS$244,65622 Aug 19
Brendan Calder
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares1,800
Max PriceUS$135.92
SellUS$69,25029 Jul 19
Michael Natale
EntityIndividual
Shares500
Max PriceUS$138.50
SellUS$249,50006 Jun 19
Kevin Roy
EntityIndividual
Shares2,000
Max PriceUS$125.00
SellUS$725,20220 Feb 19
Frederick Reichheld
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares6,300
Max PriceUS$115.11
SellUS$651,87511 Feb 19
Frederick Reichheld
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares5,800
Max PriceUS$132.81
SellUS$2,096,72108 Feb 19
Douglas Cooke
EntityIndividual
Role
Controller
Senior VP
Shares18,750
Max PriceUS$112.02

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 2.5%.


Management Team

  • Jay Hennick (62yo)

    Founder & Chairman of the Board

    • Tenure: 4.5yrs
    • Compensation: US$1.91m
  • D. Patterson (58yo)

    President

    • Tenure: 4.5yrs
    • Compensation: US$3.99m
  • Doug Cooke (59yo)

    Senior VP

    • Tenure: 4.5yrs
    • Compensation: US$1.09m
  • Chuck Fallon (56yo)

    Chief Executive Officer of FirstService Residential

    • Tenure: 6.7yrs
    • Compensation: US$1.85m
  • Jeremy Rakusin (50yo)

    Chief Financial Officer

    • Tenure: 4.5yrs
    • Compensation: US$1.90m
  • Charlie Chase (58yo)

    CEO & President of FirstService Brands

    • Tenure: 9.9yrs
  • Alex Nguyen (36yo)

    Senior Vice President of Strategy & Corporate Development

    • Tenure: 4.5yrs
    • Compensation: US$1.06m

Board Members

  • Jay Hennick (62yo)

    Founder & Chairman of the Board

    • Tenure: 4.5yrs
    • Compensation: US$1.91m
  • D. Patterson (58yo)

    President

    • Tenure: 4.5yrs
    • Compensation: US$3.99m
  • Brendan Calder (72yo)

    Independent Director

    • Tenure: 4.5yrs
    • Compensation: US$231.00k
  • Michael Stein (68yo)

    Independent Director

    • Tenure: 4.5yrs
    • Compensation: US$233.00k
  • Fred Reichheld (67yo)

    Independent Director

    • Tenure: 4.5yrs
    • Compensation: US$226.00k
  • Bernard Ghert (79yo)

    Lead Director

    • Tenure: 4.5yrs
    • Compensation: US$260.00k
  • Erin Wallace (59yo)

    Independent Director

    • Tenure: 4.2yrs
    • Compensation: US$227.00k
  • Joan Sproul (62yo)

    Independent Director

    • Tenure: 1.6yrs
    • Compensation: US$209.25k

Company Information

FirstService Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: FirstService Corporation
  • Ticker: FSV
  • Exchange: TSX
  • Founded: 1988
  • Industry: Real Estate Services
  • Sector: Real Estate
  • Market Cap: CA$4.757b
  • Shares outstanding: 39.33m
  • Website: https://www.firstservice.com

Number of Employees


Location

  • FirstService Corporation
  • 1140 Bay Street
  • Suite 4000
  • Toronto
  • Ontario
  • M5S 2B4
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
FSVTSX (The Toronto Stock Exchange)YesCommon SharesCACADJun 2015
FSVNasdaqGS (Nasdaq Global Select)YesCommon SharesUSUSDJun 2015
1GIABST (Boerse-Stuttgart)YesCommon SharesDEEURJun 2015

Biography

FirstService Corporation, together with its subsidiaries, provides residential property services to residential and commercial customers in the United States and Canada. The company operates through two se ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/07 00:50
End of Day Share Price2019/12/06 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.