Building up an investment case requires looking at a stock holistically. Today I’ve chosen to put the spotlight on Axway Software SA (EPA:AXW) due to its excellent fundamentals in more than one area. AXW is a company that has been able to sustain great financial health, trading at an attractive share price. In the following section, I expand a bit more on these key aspects. If you’re interested in understanding beyond my broad commentary, read the full report on Axway Software here.
Excellent balance sheet and good value
AXW’s debt-to-equity ratio stands at 13%, which means its debt level is reasonable. This means that AXW’s capital structure strikes a good balance between low-cost debt funding and maintaining financial flexibility without overly restrictive terms of debt. AXW appears to have made good use of debt, producing operating cash levels of 0.49x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated. AXW is currently trading below its true value, which means the market is undervaluing the company’s expected cash flow going forward. Investors have the opportunity to buy into the stock to reap capital gains, if AXW’s projected earnings trajectory does follow analyst consensus growth, which determines my intrinsic value of the company. Compared to the rest of the software industry, AXW is also trading below its peers, relative to earnings generated. This further reaffirms that AXW is potentially undervalued.
For Axway Software, I’ve compiled three relevant factors you should further examine:
- Future Outlook: What are well-informed industry analysts predicting for AXW’s future growth? Take a look at our free research report of analyst consensus for AXW’s outlook.
- Historical Performance: What has AXW’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.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of AXW? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.