DB:SC3

Stock Analysis Report

Executive Summary

ScanSource, Inc. distributes technology products and solutions in the United States, Canada, Brazil, Latin America, and Europe.


Snowflake Analysis

Excellent balance sheet and good value.


Similar Companies

Share Price & News

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


Latest Share Price and Events

Stable Share Price: SC3's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

37.3%

SC3

4.3%

DE Electronic

7.2%

DE Market


1 Year Return

-39.0%

SC3

-26.3%

DE Electronic

-17.5%

DE Market

Return vs Industry: SC3 underperformed the German Electronic industry which returned -23.9% over the past year.

Return vs Market: SC3 underperformed the German Market which returned -14.1% over the past year.


Shareholder returns

SC3IndustryMarket
7 Day37.3%4.3%7.2%
30 Day-27.8%-25.8%-22.3%
90 Day-40.5%-23.6%-26.1%
1 Year-39.0%-39.0%-24.8%-26.3%-14.9%-17.5%
3 Year-46.4%-46.4%-2.3%-5.5%-18.7%-25.7%
5 Year-48.2%-48.2%55.1%43.8%-17.8%-29.1%

Price Volatility Vs. Market

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


Simply Wall St News

No news available

Valuation

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

11.61x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: SC3 (€19.5) is trading above our estimate of fair value (€18.48)

Significantly Below Fair Value: SC3 is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: SC3 is good value based on its PE Ratio (11.6x) compared to the Electronic industry average (16.9x).

PE vs Market: SC3 is good value based on its PE Ratio (11.6x) compared to the German market (16.6x).


Price to Earnings Growth Ratio

PEG Ratio: SC3 is good value based on its PEG Ratio (0.5x)


Price to Book Ratio

PB vs Industry: SC3 is good value based on its PB Ratio (0.6x) compared to the DE Electronic industry average (1.2x).


Next Steps

Future Growth

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

23.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SC3's forecast earnings growth (23.9% per year) is above the savings rate (-0.4%).

Earnings vs Market: SC3's earnings (23.9% per year) are forecast to grow faster than the German market (14.7% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: SC3's revenue is expected to decline over the next 3 years (-5.4% per year).

High Growth Revenue: SC3's revenue is forecast to decline over the next 3 years (-5.4% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if SC3's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has ScanSource performed over the past 5 years?

-9.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SC3 has high quality earnings.

Growing Profit Margin: SC3's current net profit margins (1.2%) are lower than last year (1.4%).


Past Earnings Growth Analysis

Earnings Trend: SC3's earnings have declined by -9.3% per year over the past 5 years.

Accelerating Growth: SC3's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: SC3 had negative earnings growth (-16.5%) over the past year, making it difficult to compare to the Electronic industry average (-7.4%).


Return on Equity

High ROE: SC3's Return on Equity (5%) is considered low.


Next Steps

Financial Health

How is ScanSource's financial position?


Financial Position Analysis

Short Term Liabilities: SC3's short term assets ($1.5B) exceed its short term liabilities ($832.3M).

Long Term Liabilities: SC3's short term assets ($1.5B) exceed its long term liabilities ($450.3M).


Debt to Equity History and Analysis

Debt Level: SC3's debt to equity ratio (39%) is considered satisfactory.

Reducing Debt: SC3's debt to equity ratio has increased from 0.7% to 39% over the past 5 years.

Debt Coverage: SC3's debt is well covered by operating cash flow (39.5%).

Interest Coverage: SC3's interest payments on its debt are well covered by EBIT (7.3x coverage).


Balance Sheet

Inventory Level: SC3 has a high level of physical assets or inventory.

Debt Coverage by Assets: SC3's debt is covered by short term assets (assets are 4.3x debt).


Next Steps

Dividend

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


Dividend Yield vs Market

Notable Dividend: Unable to evaluate SC3's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate SC3's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if SC3's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if SC3's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of SC3's dividend in 3 years as they are not forecast to pay a notable one for the German market.


Next Steps

Management

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

1.5yrs

Average management tenure


CEO

Mike Baur (62yo)

27.25s

Tenure

US$3,541,196

Compensation

Mr. Michael L. Baur, also known as Mike, Founded ScanSource, Inc. in December 1992 and has been its Chief Executive Officer since December 1992 and Chairman since February, 1, 2019. Mr. Baur is the Preside ...


CEO Compensation Analysis

Compensation vs Market: Mike's total compensation ($USD3.54M) is above average for companies of similar size in the German market ($USD1.11M).

Compensation vs Earnings: Mike's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Michael Baur
Founder27.25yrsUS$3.54m0.28% $1.4m
Gerald Lyons
Senior EVP & CFOno dataUS$756.75k0.075% $362.1k
Matthew Dean
Senior EVP and Chief Legal & Strategy Officer2.17yrsUS$674.62k0.046% $221.9k
R. Benbenek
Senior Executive Vice President of Worldwide Operations & Integration0.83yrUS$889.74kno data
Gregory Dixon
Chief Technology Officer27.25yrsno datano data
Mary Gentry
Vice President of Investor Relations & Treasurerno datano datano data
Jason Weidman
Public Relations Managerno datano datano data
Frank Blackwell
Vice President of Sales for Communicationsno datano datano data
Glen Baker
Senior Executive Vice President of Supplier Services0.83yrno datano data
Paul Constantine
Executive Vice President of Supplier Services0.83yrno datano data

1.5yrs

Average Tenure

58.5yo

Average Age

Experienced Management: SC3's management team is not considered experienced ( 1.5 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Michael Baur
Founder27.25yrsUS$3.54m0.28% $1.4m
Michael Grainger
Independent Director15.42yrsUS$223.79k0.11% $520.9k
Charles Whitchurch
Independent Director11.08yrsUS$243.79k0.083% $397.7k
Peter Browning
Lead Independent Director1.08yrsUS$262.96k0.076% $365.6k
James Foody
Chairman Emeritus10.25yrsUS$36.00kno data
John Reilly
Independent Director18.75yrsUS$223.79k0.088% $422.8k
Dorothy Ramoneda
Independent Director0.33yrno data0.017% $83.3k
Elizabeth Temple
Independent Director2.5yrsUS$223.79k0.039% $189.4k

6.4yrs

Average Tenure

69yo

Average Age

Experienced Board: SC3's board of directors are considered experienced (6.4 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: SC3 insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

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


Top Shareholders

Company Information

ScanSource, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: ScanSource, Inc.
  • Ticker: SC3
  • Exchange: DB
  • Founded: 1992
  • Industry: Technology Distributors
  • Sector: Tech
  • Market Cap: US$532.262m
  • Listing Market Cap: US$480.047m
  • Shares outstanding: 25.35m
  • Website: https://www.scansource.com

Number of Employees


Location

  • ScanSource, Inc.
  • 6 Logue Court
  • Greenville
  • South Carolina
  • 29615
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SCSCNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDMar 1994
SC3DB (Deutsche Boerse AG)YesCommon StockDEEURMar 1994
SC3BRSE (Berne Stock Exchange)YesCommon StockCHCHFMar 1994

Biography

ScanSource, Inc. distributes technology products and solutions in the United States, Canada, Brazil, Latin America, and Europe. It operates in two segments, Worldwide Barcode, Networking & Security; and Worldwide Communications & Services. The Worldwide Barcode, Networking & Security segment offers a portfolio of solutions primarily for enterprise mobile computing, data capture, barcode printing, point of sale (POS), payments, networking, electronic physical security, cyber security, and other technologies. This segment offers data capture and POS solutions to automate the collection, processing, and communication of information for commercial and industrial applications, including retail sales, distribution, shipping, inventory control, materials handling, warehouse management, and health care applications. It also provides electronic physical security products, such as identification, access control, video surveillance, intrusion-related, and wireless and networking infrastructure products; and video conferencing, cloud, POS portal, and other services. The Worldwide Communications & Services segment offers a portfolio of solutions primarily for communications technologies and services comprising voice, video conferencing, wireless, data networking, cyber security, digital networks, cable, unified communications and collaboration, cloud, and technology services, as well as IP networks and other solutions for various vertical markets comprising education, healthcare, and government. The company also provides professional, contact center, and infrastructure services. ScanSource, Inc. was founded in 1992 and is headquartered in Greenville, South Carolina. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/27 23:21
End of Day Share Price2020/03/27 00:00
Earnings2019/12/31
Annual Earnings2019/06/30


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.