NasdaqCM:DLHC

Stock Analysis Report

Executive Summary

DLH Holdings Corp. provides healthcare and social services in the United States.

Rewards

Trading at 80.7% below its fair value

Earnings are forecast to grow 28.89% per year

Earnings grew by 190% over the past year

Risk Analysis

Has a high level of debt

Significant insider selling over the past 3 months

Does not have a meaningful market cap ($53M)



Snowflake Analysis

Very undervalued with reasonable growth potential.


Similar Companies

UnitedHealth Group

NYSE:UNH

Share Price & News

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


Latest Share Price and Events

Stable Share Price: DLHC has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

8.7%

DLHC

2.2%

US Professional Services

2.0%

US Market


1 Year Return

-6.7%

DLHC

33.6%

US Professional Services

23.5%

US Market

Return vs Industry: DLHC underperformed the US Professional Services industry which returned 35.7% over the past year.

Return vs Market: DLHC underperformed the US Market which returned 24.7% over the past year.


Shareholder returns

DLHCIndustryMarket
7 Day8.7%2.2%2.0%
30 Day17.7%7.1%4.3%
90 Day13.4%9.3%12.2%
1 Year-6.7%-6.7%34.8%33.6%26.1%23.5%
3 Year-25.5%-25.5%67.0%61.7%53.1%43.2%
5 Year127.4%127.4%90.6%80.2%75.5%56.1%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is DLH Holdings 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: DLHC ($4.41) is trading below our estimate of fair value ($22.88)

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


Price To Earnings Ratio

PE vs Industry: DLHC is good value based on its PE Ratio (10x) compared to the Professional Services industry average (20.5x).

PE vs Market: DLHC is good value based on its PE Ratio (10x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: DLHC is good value based on its PEG Ratio (0.3x)


Price to Book Ratio

PB vs Industry: DLHC is good value based on its PB Ratio (1.2x) compared to the US Professional Services industry average (2.9x).


Next Steps

Future Growth

How is DLH Holdings forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

28.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: DLHC's forecast earnings growth (28.9% per year) is above the savings rate (1.7%).

Earnings vs Market: DLHC's earnings (28.9% per year) are forecast to grow faster than the US market (14.3% per year).

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

Revenue vs Market: DLHC's revenue (16.7% per year) is forecast to grow faster than the US market (7.5% per year).

High Growth Revenue: DLHC's revenue (16.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: DLHC's Return on Equity is forecast to be low in 3 years time (12.1%).


Next Steps

Past Performance

How has DLH Holdings performed over the past 5 years?

-12.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: DLHC has high quality earnings.

Growing Profit Margin: DLHC's current net profit margins (3.3%) are higher than last year (1.4%).


Past Earnings Growth Analysis

Earnings Trend: DLHC's earnings have declined by -12.7% per year over the past 5 years.

Accelerating Growth: DLHC's earnings growth over the past year (190%) exceeds its 5-year average (-12.7% per year).

Earnings vs Industry: DLHC earnings growth over the past year (190%) exceeded the Professional Services industry 23.5%.


Return on Equity

High ROE: DLHC's Return on Equity (11.7%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is DLH Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: DLHC's short term assets ($26.8M) do not cover its short term liabilities ($29.5M).

Long Term Liabilities: DLHC's short term assets ($26.8M) do not cover its long term liabilities ($54.2M).


Debt to Equity History and Analysis

Debt Level: DLHC's debt to equity ratio (117.7%) is considered high.

Reducing Debt: Insufficient data to determine if DLHC's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: DLHC's debt is well covered by operating cash flow (33.6%).

Interest Coverage: DLHC's interest payments on its debt are well covered by EBIT (4.6x coverage).


Balance Sheet

Inventory Level: DLHC has a low level of unsold assets or inventory.

Debt Coverage by Assets: DLHC's debt is not covered by short term assets (assets are 0.5x debt).


Next Steps

Dividend

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


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.7%industryaverage1.0%forecastin3Yearsn/a

Current dividend yield vs market & industry

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

High Dividend: Unable to evaluate DLHC'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 DLHC's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if DLHC'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 DLHC's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

What is the CEO of DLH Holdings's salary, the management and board of directors tenure and is there insider trading?

8.3yrs

Average management tenure


CEO

Zach Parker (62yo)

9.9yrs

Tenure

US$958,536

Compensation

Mr. Zachary C. Parker, also known as Zach, has been the Chief Executive Officer and President of DLH Holdings Corp., the parent company of TeamStaff Government Solutions, Inc. and DLH Solutions, Inc. since ...


CEO Compensation Analysis

Compensation vs Market: Zach's total compensation ($USD958.54K) is above average for companies of similar size in the US market ($USD519.76K).

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


Management Age and Tenure

8.3yrs

Average Tenure

60yo

Average Age

Experienced Management: DLHC's management team is seasoned and experienced (8.3 years average tenure).


Board Age and Tenure

7.2yrs

Average Tenure

65yo

Average Age

Experienced Board: DLHC's board of directors are considered experienced (7.2 years average tenure).


Insider Trading

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


Recent Insider Transactions

BuyUS$127,58826 Dec 19
Wynnefield Capital, Inc.
EntityCompany
Shares31,897
Max PriceUS$4.00
BuyUS$40,00019 Dec 19
Kathryn JohnBull
EntityIndividual
Role
Chief Financial Officer
CFO & Treasurer
Shares10,000
Max PriceUS$4.00
BuyUS$40,00019 Dec 19
Martin Delaney
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares10,000
Max PriceUS$4.00
SellUS$207,58819 Dec 19
William Alderman
EntityIndividual
Shares51,897
Max PriceUS$4.00
BuyUS$42,50012 Aug 19
Wynnefield Capital, Inc.
EntityCompany
Shares10,000
Max PriceUS$4.25
SellUS$120,20018 Mar 19
Kevin Wilson
EntityIndividual
Role
Unit President
President of DLH Solutions Inc
Shares20,000
Max PriceUS$6.01
SellUS$703,72218 Mar 19
Wynnefield Capital, Inc.
EntityCompany
Shares116,850
Max PriceUS$6.04
SellUS$1,324,07812 Mar 19
Wynnefield Capital, Inc.
EntityCompany
Shares219,500
Max PriceUS$6.10
SellUS$126,36507 Mar 19
Wynnefield Capital, Inc.
EntityCompany
Shares20,058
Max PriceUS$6.30
SellUS$163,80027 Feb 19
Wynnefield Capital, Inc.
EntityCompany
Shares26,000
Max PriceUS$6.30
SellUS$82,51326 Feb 19
William Alderman
EntityIndividual
Shares13,139
Max PriceUS$6.28

Ownership Breakdown

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


Management Team

  • Victor DiGioia

    Secretary

    • Kevin Wilson (54yo)

      President of DLH Solutions Inc

      • Tenure: 11.3yrs
      • Compensation: US$403.18k
    • Zach Parker (62yo)

      President

      • Tenure: 9.9yrs
      • Compensation: US$958.54k
    • John Armstrong (70yo)

      Executive Vice President of Corporate Development

      • Tenure: 9.1yrs
      • Compensation: US$350.32k
    • Kathryn JohnBull (60yo)

      CFO & Treasurer

      • Tenure: 7.6yrs
      • Compensation: US$624.16k
    • Gil Tadmor

      Corporate Chief Technology Officer

      • Tenure: 1.3yrs
    • Helene Fisher (55yo)

      President of Mission Services & Solutions operating unit

      • Tenure: 3yrs
      • Compensation: US$472.64k
    • Chris Witty

      Managing Director Investor Relations


      Board Members

      • Martin Delaney (76yo)

        Independent Director

        • Tenure: 21.5yrs
        • Compensation: US$127.50k
      • Jim Allen (70yo)

        Independent Director

        • Tenure: 2.5yrs
        • Compensation: US$52.09k
      • Austin Yerks (73yo)

        Independent Director

        • Tenure: 7.2yrs
        • Compensation: US$126.00k
      • Rick Wasserman (64yo)

        Chairman of the Board

        • Tenure: 10.5yrs
        • Compensation: US$139.69k
      • Zach Parker (62yo)

        President

        • Tenure: 9.9yrs
        • Compensation: US$958.54k
      • Elder Granger (65yo)

        Independent Director

        • Tenure: 5.2yrs
        • Compensation: US$122.75k
      • Frances Murphy (65yo)

        Independent Director

        • Tenure: 3.9yrs
        • Compensation: US$117.48k

      Company Information

      DLH Holdings Corp.'s company bio, employee growth, exchange listings and data sources


      Key Information

      • Name: DLH Holdings Corp.
      • Ticker: DLHC
      • Exchange: NasdaqCM
      • Founded: 1969
      • Industry: Human Resource and Employment Services
      • Sector: Commercial Services
      • Market Cap: US$59.128m
      • Shares outstanding: 12.10m
      • Website: https://www.dlhcorp.com

      Number of Employees


      Location

      • DLH Holdings Corp.
      • Building 3
      • Suite 700
      • Atlanta
      • Georgia
      • 30305
      • United States

      Listings

      TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
      DLHCNasdaqCM (Nasdaq Capital Market)YesCommon StockUSUSDMay 1986
      TS8ADB (Deutsche Boerse AG)YesCommon StockDEEURMay 1986

      Biography

      DLH Holdings Corp. provides healthcare and social services in the United States. It offers defense and veterans’ health solutions, including case management, physical and behavioral health examinations, and medical administration and logistics services. The company also provides a range of human services and solutions, which consists of monitoring and evaluation, electronic medical records migration, data collection and management, and nutritional and social health assessments; and IT system architecture design, migration plan, and ongoing maintenance services. In addition, it offers public health and life sciences services, such as clinical trials, epidemiology studies, and disease prevention; and health promotion to underserved and hard to reach at-risk communities through development of strategic communication campaigns, research on emerging trends, health informatics analyses, and application of best practices. The company offers its services to government agencies and other government clients. The company was formerly known as TeamStaff, Inc. and changed its name to DLH Holdings Corp. in June 2012. DLH Holdings Corp. was founded in 1969 and is headquartered in Atlanta, Georgia. 


      Company Analysis and Financial Data Status

      All financial data provided by Standard & Poor's Capital IQ.
      DataLast Updated (UTC time)
      Company Analysis2020/01/17 23:44
      End of Day Share Price2020/01/17 00:00
      Earnings2019/09/30
      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.