Vectrus (NYSE:VEC) - Share price, News & Analysis

Q: What is the Fair Price of VEC when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

VEC ($33.92) is trading below our estimate of [[fair value]] ($157.36)

VEC fundamental analysis
Snowflake Score
Valuation	6/6
Future Growth	3/6
Past Performance	2/6
Financial Health	6/6
Dividends	0/6

VEC Stock Overview

Vectrus, Inc. provides facility and base operations, supply chain and logistics, information technology mission support, and engineering and digital integration services.

Rewards

Trading at 78.4% below our estimate of its fair value

Earnings are forecast to grow 63.43% per year

Risk Analysis

VEC passed our risk checks.

Vectrus Competitors

National Presto Industries

NYSE:NPK

US$466.4m

Ducommun

NYSE:DCO

US$527.8m

Park Aerospace

NYSE:PKE

US$267.6m

AerSale

NasdaqCM:ASLE

US$749.0m

Price History & Performance

Summary of all time highs, changes and price drops for Vectrus
Historical stock prices
Current Share Price	US$33.92
52 Week High	US$52.67
52 Week Low	US$30.69
Beta	1.12
1 Month Change	-1.99%
3 Month Change	-8.62%
1 Year Change	-28.83%
3 Year Change	-22.77%
5 Year Change	-0.088%
Change since IPO	57.47%

Shareholder Returns

	VEC	US Aerospace & Defense	US Market
7D	1.0%	2.1%	-2.2%
1Y	-28.8%	2.6%	-19.1%

Return vs Industry: VEC underperformed the US Aerospace & Defense industry which returned 2.6% over the past year.

Return vs Market: VEC underperformed the US Market which returned -21.2% over the past year.

Price Volatility

Is VEC's price volatile compared to industry and market?
VEC volatility
VEC Average Weekly Movement	5.7%
Aerospace & Defense Industry Average Movement	7.5%
Market Average Movement	8.1%
10% most volatile stocks in US Market	16.9%
10% least volatile stocks in US Market	3.3%

Stable Share Price: VEC is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: VEC's weekly volatility (6%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2014	8,100	Chuck Prow	https://www.vectrus.com

Vectrus, Inc. provides facility and base operations, supply chain and logistics, information technology mission support, and engineering and digital integration services. It offers facility and base operations services, such as facilities operations and maintenance, security, base life support, facilities engineering and management, airfield management, civil engineering, public works, transportation operations, and emergency services. The company also offers supply chain and logistics services, including warehouse management and distribution, asset management and logistics, integrated logistics, supply chain as a service, full spectrum aviation maintenance, repair and overhaul, and equipment maintenance, repair, and services.

Vectrus Fundamentals Summary

How do Vectrus's earnings and revenue compare to its market cap?
VEC fundamental statistics
Market Cap	US$401.16m
Earnings (TTM)	US$36.54m
Revenue (TTM)	US$1.81b

11.0x

P/E Ratio

0.2x

P/S Ratio

Is VEC overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
VEC income statement (TTM)
Revenue	US$1.81b
Cost of Revenue	US$1.65b
Gross Profit	US$157.26m
Other Expenses	US$120.73m
Earnings	US$36.54m

Last Reported Earnings

Apr 01, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	3.09
Gross Margin	8.71%
Net Profit Margin	2.02%
Debt/Equity Ratio	33.6%

How did VEC perform over the long term?

See historical performance and comparison

We’ve recently updated our valuation analysis.

Valuation

Is VEC undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

6/6

Valuation Score 6/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for VEC?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for VEC. This is calculated by dividing VEC's market cap by their current preferred multiple.
What is VEC's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$401.16m

VEC key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	0.3x
Enterprise Value/EBITDA	8.1x
PEG Ratio	0.2x

Price to Earnings Ratio vs Peers

How does VEC's PE Ratio compare to its peers?

VEC PE Ratio vs Peers

The above table shows the PE ratio for VEC vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	22x
NPK National Presto Industries	23.8x	n/a	US$466.4m
DCO Ducommun	15.4x	18.7%	US$527.8m
PKE Park Aerospace	31.6x	n/a	US$267.6m
ASLE AerSale	17.3x	n/a	US$749.0m
VEC Vectrus	11x	63.4%	US$401.2m

Forward PE

Price-To-Earnings vs Peers: VEC is good value based on its Price-To-Earnings Ratio (11x) compared to the peer average (22x).

Price to Earnings Ratio vs Industry

How does VEC's PE Ratio compare vs other companies in the US Aerospace & Defense Industry?

Price-To-Earnings vs Industry: VEC is good value based on its Price-To-Earnings Ratio (11x) compared to the US Aerospace & Defense industry average (18.6x)

Price to Earnings Ratio vs Fair Ratio

What is VEC's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

VEC PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	11x
Fair PE Ratio	43.8x

Price-To-Earnings vs Fair Ratio: VEC is good value based on its Price-To-Earnings Ratio (11x) compared to the estimated Fair Price-To-Earnings Ratio (43.8x).

Share Price vs Fair Value

What is the Fair Price of VEC when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: VEC ($33.92) is trading below our estimate of fair value ($157.36)

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

Price to Earnings Growth Ratio

PEG Ratio: VEC is good value based on its PEG Ratio (0.2x)

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Future Growth

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

Future Growth Score

3/6

Future Growth Score 3/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

63.4%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: VEC's forecast earnings growth (63.4% per year) is above the savings rate (1.9%).

Earnings vs Market: VEC's earnings (63.4% per year) are forecast to grow faster than the US market (13.6% per year).

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

Revenue vs Market: VEC's revenue (5.9% per year) is forecast to grow slower than the US market (8.2% per year).

High Growth Revenue: VEC's revenue (5.9% 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 VEC's Return on Equity is forecast to be high in 3 years time

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Past Performance

How has Vectrus performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

1.9%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: VEC has high quality earnings.

Growing Profit Margin: VEC's current net profit margins (2%) are lower than last year (2.7%).

Past Earnings Growth Analysis

Earnings Trend: VEC's earnings have grown by 1.9% per year over the past 5 years.

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

Earnings vs Industry: VEC had negative earnings growth (-9.3%) over the past year, making it difficult to compare to the Aerospace & Defense industry average (27.7%).

Return on Equity

High ROE: VEC's Return on Equity (10.3%) is considered low.

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Financial Health

How is Vectrus's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: VEC's short term assets ($437.6M) exceed its short term liabilities ($359.6M).

Long Term Liabilities: VEC's short term assets ($437.6M) exceed its long term liabilities ($185.8M).

Debt to Equity History and Analysis

Debt Level: VEC's net debt to equity ratio (27.1%) is considered satisfactory.

Reducing Debt: VEC's debt to equity ratio has reduced from 63.4% to 33.6% over the past 5 years.

Debt Coverage: VEC's debt is well covered by operating cash flow (47.6%).

Interest Coverage: VEC's interest payments on its debt are well covered by EBIT (6.6x coverage).

Balance Sheet

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Dividend

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

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

Dividend Yield vs Market

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

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

Stability and Growth of Payments

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

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

Earnings Payout to Shareholders

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

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as VEC has not reported any payouts.

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Management

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

3.4yrs

Average management tenure

CEO

Chuck Prow (63 yo)

5.58yrs

Tenure

US$4,083,541

Compensation

Mr. Charles L. Prow, also known as Chuck, serves as a Principal of Sterling Capital Group Partners. Mr. Prow serves as the President of CPS-Professional Services. He has been the Chief Executive Officer an...

CEO Compensation Analysis

Compensation vs Market: Chuck's total compensation ($USD4.08M) is above average for companies of similar size in the US market ($USD2.92M).

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

Leadership Team

Experienced Management: VEC's management team is considered experienced (3.4 years average tenure).

Board Members

Experienced Board: VEC's board of directors are considered experienced (8.5 years average tenure).

Ownership

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

Insider Trading Volume

Insider Buying: VEC 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.

Data	Last Updated (UTC time)
Company Analysis	2022/07/04 00:00
End of Day Share Price	2022/07/01 00:00
Earnings	2022/04/01
Annual Earnings	2021/12/31