NYSE:CUB

Stock Analysis Report

Executive Summary

Cubic Corporation designs, integrates, and operates systems, products, and services for command, control, communications, computers, intelligence, surveillance, and reconnaissance (C4ISR) customers worldwide.

Rewards

Trading at 84% below its fair value

Earnings are forecast to grow 60.15% per year

Earnings grew by 192% over the past year

Risk Analysis

Interest payments are not well covered by earnings

Highly volatile share price over past 3 months

Large one-off items impacting financial results

Significant insider selling over the past 3 months

+ 1 more risk


Snowflake Analysis

Good value with moderate growth potential.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

6.3%

CUB

-5.7%

US Aerospace & Defense

2.4%

US Market


1 Year Return

-27.0%

CUB

-16.9%

US Aerospace & Defense

-10.0%

US Market

Return vs Industry: CUB underperformed the US Aerospace & Defense industry which returned -19.7% over the past year.

Return vs Market: CUB underperformed the US Market which returned -13.3% over the past year.


Shareholder returns

CUBIndustryMarket
7 Day6.3%-5.7%2.4%
30 Day-15.0%-22.7%-11.0%
90 Day-40.7%-32.4%-19.4%
1 Year-26.7%-27.0%-5.8%-16.9%-8.1%-10.0%
3 Year-15.3%-16.4%12.2%-4.5%17.3%9.6%
5 Year-16.3%-18.4%48.0%17.8%36.1%21.1%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: CUB ($40.84) is trading below our estimate of fair value ($255.94)

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


Price To Earnings Ratio

PE vs Industry: CUB is poor value based on its PE Ratio (33.8x) compared to the Aerospace & Defense industry average (12.7x).

PE vs Market: CUB is poor value based on its PE Ratio (33.8x) compared to the US market (12.5x).


Price to Earnings Growth Ratio

PEG Ratio: CUB is good value based on its PEG Ratio (0.6x)


Price to Book Ratio

PB vs Industry: CUB is good value based on its PB Ratio (1.3x) compared to the US Aerospace & Defense industry average (1.7x).


Next Steps

Future Growth

How is Cubic forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

60.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CUB's forecast earnings growth (60.1% per year) is above the savings rate (1.7%).

Earnings vs Market: CUB's earnings (60.1% per year) are forecast to grow faster than the US market (13.4% per year).

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

Revenue vs Market: CUB's revenue (7% per year) is forecast to grow slower than the US market (7% per year).

High Growth Revenue: CUB's revenue (7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

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


Next Steps

Past Performance

How has Cubic performed over the past 5 years?

-16.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CUB has a large one-off gain of $14.0M impacting its December 31 2019 financial results.

Growing Profit Margin: CUB's current net profit margins (2.5%) are higher than last year (1%).


Past Earnings Growth Analysis

Earnings Trend: CUB's earnings have declined by -16% per year over the past 5 years.

Accelerating Growth: CUB's earnings growth over the past year (192%) exceeds its 5-year average (-16% per year).

Earnings vs Industry: CUB earnings growth over the past year (192%) exceeded the Aerospace & Defense industry 3%.


Return on Equity

High ROE: CUB's Return on Equity (3.7%) is considered low.


Next Steps

Financial Health

How is Cubic's financial position?


Financial Position Analysis

Short Term Liabilities: CUB's short term assets ($709.0M) exceed its short term liabilities ($518.5M).

Long Term Liabilities: CUB's short term assets ($709.0M) exceed its long term liabilities ($427.0M).


Debt to Equity History and Analysis

Debt Level: CUB's debt to equity ratio (54%) is considered high.

Reducing Debt: CUB's debt to equity ratio has increased from 21% to 54% over the past 5 years.

Debt Coverage: CUB's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: CUB's interest payments on its debt are not well covered by EBIT (2.6x coverage).


Balance Sheet


Next Steps

Dividend

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

0.66%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: CUB's dividend (0.66%) isn’t notable compared to the bottom 25% of dividend payers in the US market (2.01%).

High Dividend: CUB's dividend (0.66%) is low compared to the top 25% of dividend payers in the US market (5.66%).


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: CUB is not paying a notable dividend for the US market.


Future Payout to Shareholders

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


Next Steps

Management

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

2.0yrs

Average management tenure


CEO

Brad Feldmann (57yo)

5.75s

Tenure

US$5,881,964

Compensation

Mr. Bradley H. Feldmann, also known as Brad, has been the President of Cubic Corporation since January 31, 2013, has been its chairman since February 19, 2018 and its Chief Executive Officer since July 1,  ...


CEO Compensation Analysis

Compensation vs Market: Brad's total compensation ($USD5.88M) is about average for companies of similar size in the US market ($USD4.74M).

Compensation vs Earnings: Brad's compensation has increased by more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Bradley Feldmann
Chairman5.75yrsUS$5.88m0.21% $2.6m
Anshooman Aga
CFO & Executive VP2.5yrsUS$1.87m0.011% $146.2k
Michael Knowles
Senior VP & President of Cubic Global Defense1.5yrsUS$1.15m0.0051% $65.0k
Michael Twyman
Senior VP & President of Cubic Mission Solutions3.92yrsUS$1.79m0.12% $1.5m
Mark Harrison
Senior VP & Chief Accounting Officer0.83yrUS$701.91k0.032% $412.4k
Jim Colson
VP & CTO0.83yrno datano data
Diane Dyer
Director of Investor Relationsno datano datano data
Kirsten Nielsen
Vice President of Investor Relations2.42yrsno datano data
Hilary Hageman
Senior VP0.50yrno datano data

2.0yrs

Average Tenure

54yo

Average Age

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


Board Members

NamePositionTenureCompensationOwnership
Bradley Feldmann
Chairman5.75yrsUS$5.88m0.21% $2.6m
Maureen Breakiron-Evans
Independent Director3.17yrsUS$217.00k0.041% $522.0k
Steven Norris
Independent Director6yrsUS$222.00k0.019% $247.8k
David Begg
Member of Advisory Boardno datano datano data
Prithviraj Banerjee
Independent Director1.58yrsUS$212.50k0.0034% $43.0k
Stephen Shewmaker
Member of Advisory Boardno dataUS$1.38mno data
Bruce Blakley
Independent Director12.17yrsUS$226.50k0.029% $365.3k
David Melcher
Lead Independent Director0.75yrUS$225.63k0.016% $205.6k
Bruce Baird
Member of Advisory Boardno datano datano data
Janice Hamby
Independent Director5yrsUS$217.93k0.016% $200.6k

3.2yrs

Average Tenure

64yo

Average Age

Experienced Board: CUB's board of directors are considered experienced (3.2 years average tenure).


Ownership

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


Insider Trading Volume

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


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 13.2%.


Top Shareholders

Company Information

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


Key Information

  • Name: Cubic Corporation
  • Ticker: CUB
  • Exchange: NYSE
  • Founded: 1949
  • Industry: Aerospace and Defense
  • Sector: Capital Goods
  • Market Cap: US$1.280b
  • Shares outstanding: 31.30m
  • Website: https://www.cubic.com

Number of Employees


Location

  • Cubic Corporation
  • 9333 Balboa Avenue
  • San Diego
  • California
  • 92123
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
CUBNYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1968
UBQDB (Deutsche Boerse AG)YesCommon StockDEEURJan 1968

Biography

Cubic Corporation designs, integrates, and operates systems, products, and services for command, control, communications, computers, intelligence, surveillance, and reconnaissance (C4ISR) customers worldwide. The company operates through three segments: Cubic Transportation Systems (CTS), Cubic Mission Solutions (CMS), and Cubic Global Defense Systems (CGD). The CTS segment integrates payment and information technology and services for intelligent travel solutions. It delivers integrated systems for transportation and traffic management; and tools for travelers to choose the smartest and easiest way to travel and pay for their journeys, as well as enables transportation authorities and agencies to manage demand across the entire transportation network. The CMS segment offers networked C4ISR solutions for defense, intelligence, security, and commercial missions. The CGD Systems segment supplies live, virtual, constructive, and game-based training solutions to the U.S. Department of Defense, other U.S. government agencies, and allied nations. Cubic Corporation has a partnership agreement with the University of Alabama in Huntsville (UAH) College of Nursing to develop and test an emergency ventilator device. The company was incorporated in 1949 and is headquartered in San Diego, California. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/08 07:19
End of Day Share Price2020/04/07 00:00
Earnings2019/12/31
Annual Earnings2019/09/30


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.