NasdaqGS:QADA

Stock Analysis Report

Executive Summary

QAD Inc. provides enterprise software solutions for manufacturing companies in the automotive, life sciences, consumer products, food and beverage, high technology, and industrial products industries worldwide.

Rewards

Trading at 37.4% below its fair value

Earnings are forecast to grow 118.3% per year

Risk Analysis

No risks detected for QADA from our risk checks.


Snowflake Analysis

Excellent balance sheet with reasonable growth potential.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

-9.6%

QADA

-7.4%

US Software

-7.6%

US Market


1 Year Return

8.2%

QADA

27.3%

US Software

10.2%

US Market

Return vs Industry: QADA underperformed the US Software industry which returned 27.3% over the past year.

Return vs Market: QADA underperformed the US Market which returned 10.2% over the past year.


Shareholder returns

QADAIndustryMarket
7 Day-9.6%-7.4%-7.6%
30 Day-6.4%0.2%-4.5%
90 Day-4.2%7.0%-0.6%
1 Year8.9%8.2%28.6%27.3%12.5%10.2%
3 Year77.6%74.0%132.6%122.8%37.1%28.3%
5 Year136.4%126.0%200.3%178.7%60.8%43.2%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

37.4%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: QADA ($48.97) is trading below our estimate of fair value ($78.24)

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


Price To Earnings Ratio

PE vs Industry: QADA is unprofitable, so we can't compare its PE Ratio to the Software industry average.

PE vs Market: QADA is unprofitable, so we can't compare its PE Ratio to the US market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate QADA's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: QADA is overvalued based on its PB Ratio (8.5x) compared to the US Software industry average (5.5x).


Next Steps

Future Growth

How is QAD forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

118.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: QADA is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (1.7%).

Earnings vs Market: QADA is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: QADA's is expected to become profitable in the next 3 years.

Revenue vs Market: QADA's revenue (7.9% per year) is forecast to grow faster than the US market (7.6% per year).

High Growth Revenue: QADA's revenue (7.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: QADA's Return on Equity is forecast to be low in 3 years time (14.4%).


Next Steps

Past Performance

How has QAD performed over the past 5 years?

-40.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: QADA is currently unprofitable.

Growing Profit Margin: QADA is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: QADA is unprofitable, and losses have increased over the past 5 years at a rate of -40.1% per year.

Accelerating Growth: Unable to compare QADA's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: QADA is unprofitable, making it difficult to compare its past year earnings growth to the Software industry (19%).


Return on Equity

High ROE: QADA has a negative Return on Equity (-9.76%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is QAD's financial position?


Financial Position Analysis

Short Term Liabilities: QADA's short term assets ($196.6M) exceed its short term liabilities ($126.5M).

Long Term Liabilities: QADA's short term assets ($196.6M) exceed its long term liabilities ($31.5M).


Debt to Equity History and Analysis

Debt Level: QADA's debt to equity ratio (11.3%) is considered satisfactory.

Reducing Debt: QADA's debt to equity ratio has reduced from 21.9% to 11.3% over the past 5 years.


Balance Sheet

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

Debt Coverage by Assets: QADA's debt is covered by short term assets (assets are 14.9x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: QADA has been profitable on average in the past, therefore cash runway is not a concern.

Forecast Cash Runway: QADA has been profitable on average in the past, therefore cash runway is not a concern.


Next Steps

Dividend

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

0.59%

Current Dividend Yield


Dividend Yield vs Market

company0.6%marketbottom25%1.5%markettop25%4.0%industryaverage1.3%forecastin3Years0.6%

Current dividend yield vs market & industry

Notable Dividend: QADA's dividend (0.59%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.53%).

High Dividend: QADA's dividend (0.59%) is low compared to the top 25% of dividend payers in the US market (3.96%).


Stability and Growth of Payments

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

Growing Dividend: QADA 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: QADA is not paying a notable dividend for the US market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of QADA'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?

8.8yrs

Average management tenure


CEO

Anton Chilton (51yo)

1.2yrs

Tenure

US$1,506,522

Compensation

Mr. Anton Chilton has been the Chief Executive Officer and Director of QAD Inc. since December 19, 2018. Mr. Chilton was Chief of Global Field Operations and Executive Vice President at QAD Inc. since Marc ...


CEO Compensation Analysis

Compensation vs Market: Anton's total compensation ($USD1.51M) is below average for companies of similar size in the US market ($USD2.58M).

Compensation vs Earnings: Anton's compensation has increased whilst the company is unprofitable.


Leadership Team

NamePositionTenureCompensationOwnership
Anton Chilton
CEO & Director1.2yrsUS$1.51m0.19% $1.8m
Pamela Lopker
Founder34.1yrsUS$3.85m1.02% $9.7m
Daniel Lender
CFO, Executive VP & Corporate Secretary16.6yrsUS$2.08m0.73% $6.9m
Kara Bellamy
Chief Accounting Officer12.1yrsUS$685.35k0.035% $328.4k
Tony Winter
Chief Technology Officer8.8yrsno datano data
Leif Petersen
Chief Information Officer0yrsno datano data
Edward Boclair
Senior Vice President5.6yrsno datano data
Carter Lloyds
Chief Marketing Officer & Senior VP0yrsno datano data
Kaye Swanson
Chief People Officer5.6yrsno datano data
Charles Eggerding
Senior Vice President0yrsno datano data

8.8yrs

Average Tenure

51.5yo

Average Age

Experienced Management: QADA's management team is seasoned and experienced (8.8 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Anton Chilton
CEO & Director1.2yrsUS$1.51m0.19% $1.8m
Pamela Lopker
Founder34.1yrsUS$3.85m1.02% $9.7m
Lee Roberts
Independent Director12.1yrsUS$289.00k0.14% $1.3m
Peter van Cuylenburg
Chairman of the Board & Lead Director1.5yrsUS$391.03k0.15% $1.4m
Kathleen Crusco
Independent Director0.2yrsno data0.020% $186.2k
Scott Adelson
Independent Director13.8yrsUS$277.50k0.29% $2.7m

6.8yrs

Average Tenure

61yo

Average Age

Experienced Board: QADA's board of directors are considered experienced (6.8 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: Insufficient data to determine if 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

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


Key Information

  • Name: QAD Inc.
  • Ticker: QADA
  • Exchange: NasdaqGS
  • Founded: 1979
  • Industry: Application Software
  • Sector: Software
  • Market Cap: US$946.864m
  • Shares outstanding: 20.35m
  • Website: https://www.qad.com

Number of Employees


Location

  • QAD Inc.
  • 100 Innovation Place
  • Santa Barbara
  • California
  • 93108
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
QADANasdaqGS (Nasdaq Global Select)YesClass A Common StockUSUSDDec 2010
QADBNasdaqGS (Nasdaq Global Select)Class B Common StockUSUSDDec 2010

Biography

QAD Inc. provides enterprise software solutions for manufacturing companies in the automotive, life sciences, consumer products, food and beverage, high technology, and industrial products industries worldwide. The company offers QAD Cloud ERP and QAD Enterprise Applications, an integrated suite of software applications, which support the core business processes. Its QAD Enterprise Applications include software solutions, such as QAD Financials to manage and control finance and accounting processes; QAD Customer Management for manufacturers to acquire new customers; QAD Manufacturing, which supports manufacturing business processes; QAD Automation Solutions that improve manufacturers’ material transaction processing; QAD Demand and Supply Chain Planning that fulfills materials planning and logistics requirements; QAD Supply Chain Execution that offers tools to support inventory and warehouse management; and QAD Transportation Management to manage and optimize outside carriers for shipments. The company’s QAD Enterprise Applications also comprise QAD Service and Support that handles service calls, manages service queues, and organizes mobile field resources; QAD Enterprise Asset Management to manage, maintain, and install capital equipment; Action Centers with Embedded Analytics; and QAD Analytics that provides data to measure performance. It also offers QAD Enterprise Quality Management that provides quality management and regulatory compliance solutions; QAD Interoperability, which integrates QAD Enterprise Applications with other non-QAD core business applications; and QAD Internationalization, which supports companies that manufacture and distribute their products worldwide. In addition, it provides customer support, product updates, maintenance, and professional services. The company markets its products through direct and indirect sales channels; and distributors and sales agents. QAD Inc. was founded in 1979 and is headquartered in Santa Barbara, California. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/27 00:51
End of Day Share Price2020/02/26 00:00
Earnings2019/10/31
Annual Earnings2019/01/31


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.