Zur Rose Group AG (VTX:ROSE): Cash Is King

Two important questions to ask before you buy Zur Rose Group AG (SWX:ROSE) is, how it makes money and how it spends its cash. This difference directly flows down to how much the stock is worth. Operating in the drug retail industry, Zur Rose Group is currently valued at CHF716.03M. Today we will examine Zur Rose Group’s ability to generate cash flows, as well as the level of capital expenditure it is expected to incur over the next couple of years, which will result in how much money goes to you. View our latest analysis for Zur Rose Group

What is Zur Rose Group's cash yield?

Free cash flow (FCF) is the amount of cash Zur Rose Group has left after it pays off its expenses, including its net capital expenditures, which is what the company needs to spend each year to maintain or grow its business operations. I will be analysing Zur Rose Group’s FCF by looking at its FCF yield and its operating cash flow growth. The yield will tell us whether the stock is generating enough cash to compensate for the risk investors take on by holding a single stock, which I will compare to the market index. The growth will proxy for sustainability levels of this cash generation.

After accounting for capital expenses required to run the business, Zur Rose Group is not able to generate positive FCF, leading to a negative FCF yield – not very useful for interpretation!

What’s the cash flow outlook for Zur Rose Group?

Zur Rose Group’s FCF may be negative today, but is operating cash flows expected to improve in the future? Let’s examine the cash flow trend the company is anticipated to produce over time. In the next few years, Zur Rose Group is expected to deliver a decline in operating cash flow compared to the most recent level, which is not an encouraging sign. Below is a table of Zur Rose Group’s operating cash flow in the past year, as well as the anticipated level going forward.

	Current	+1 year	+2 year	+3 year
Operating Cash Flow (OCF)	-CHF22.23M	-CHF20.70M	CHF7.10M	CHF22.96M
OCF Growth Year-On-Year		-6.87%	-134.30%	223.33%
OCF Growth From Current Year			-131.94%	-203.28%

Next Steps:

Keep in mind that cash is only one aspect of investment analysis and there are other important fundamentals to assess. I recommend you continue to research Zur Rose Group to get a more holistic view of the company by looking at:

1. Historical Performance: What has ROSE's returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Zur Rose Group’s board and the CEO’s back ground.
3. Other High-Performing Stocks: If you believe you should cushion your portfolio with something less risky, scroll through our free list of these great stocks here.

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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.