Alliance Data Systems
Market Cap
US$1.6b
Last Updated
2020/03/31 00:33 UTC
Data Sources
Company Financials +
Executive Summary
Alliance Data Systems Corporation provides data-driven marketing and loyalty solutions worldwide.
Rewards
Risk Analysis
+ 1 more risk
Snowflake Analysis
Very undervalued average dividend payer.
Similar Companies
Share Price & News
How has Alliance Data Systems's share price performed over time and what events caused price changes?
Latest Share Price and Events
Stable Share Price: ADS's share price has been volatile over the past 3 months.
Market Performance
7 Day Return
-18.4%
ADS
8.3%
US IT
7.2%
US Market
1 Year Return
-80.5%
ADS
-2.8%
US IT
-10.4%
US Market
Return vs Industry: ADS underperformed the US IT industry which returned -5% over the past year.
Return vs Market: ADS underperformed the US Market which returned -12.7% over the past year.
Shareholder returns
| ADS | Industry | Market | |
|---|---|---|---|
| 7 Day | -18.4% | 8.3% | 7.2% |
| 30 Day | -60.1% | -12.6% | -12.6% |
| 90 Day | -69.4% | -15.2% | -19.4% |
| 1 Year | -80.0%-80.5% | -1.8%-2.8% | -8.5%-10.4% |
| 3 Year | -85.8%-86.3% | 63.1%56.0% | 15.8%8.3% |
| 5 Year | -88.0%-88.5% | 92.0%75.1% | 35.8%21.0% |
Price Volatility Vs. Market
How volatile is Alliance Data Systems's share price compared to the market and industry in the last 5 years?
Simply Wall St News
1 week ago | Simply Wall St
Non-Executive Chairman Robert Minicucci Just Bought Shares In Alliance Data Systems Corporation (NYSE:ADS)3 weeks ago | Simply Wall St
We Think Alliance Data Systems (NYSE:ADS) Is Taking Some Risk With Its Debt3 months ago | Simply Wall St
Are Alliance Data Systems's (NYSE:ADS) Statutory Earnings A Good Reflection Of Its Earnings Potential?Valuation
Is Alliance Data Systems 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: ADS ($36.47) is trading below our estimate of fair value ($98.39)
Significantly Below Fair Value: ADS is trading below fair value by more than 20%.
Price To Earnings Ratio
PE vs Industry: ADS is good value based on its PE Ratio (3.2x) compared to the IT industry average (23.1x).
PE vs Market: ADS is good value based on its PE Ratio (3.2x) compared to the US market (13x).
Price to Earnings Growth Ratio
PEG Ratio: ADS is good value based on its PEG Ratio (0.2x)
Price to Book Ratio
PB vs Industry: ADS is good value based on its PB Ratio (1.1x) compared to the US IT industry average (2.8x).
Next Steps
Future Growth
How is Alliance Data Systems forecast to perform in the next 1 to 3 years based on estimates from 14 analysts?
13.4%
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: ADS's forecast earnings growth (13.4% per year) is above the savings rate (1.7%).
Earnings vs Market: ADS's earnings (13.4% per year) are forecast to grow faster than the US market (12.3% per year).
High Growth Earnings: ADS's earnings are forecast to grow, but not significantly.
Revenue vs Market: ADS's revenue (0.4% per year) is forecast to grow slower than the US market (7.3% per year).
High Growth Revenue: ADS's revenue (0.4% per year) is forecast to grow slower than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: ADS's Return on Equity is forecast to be high in 3 years time (32.5%)
Next Steps
Past Performance
How has Alliance Data Systems performed over the past 5 years?
13.5%
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: ADS has a large one-off loss of $190.0M impacting its December 31 2019 financial results.
Growing Profit Margin: ADS's current net profit margins (10.1%) are lower than last year (16.7%).
Past Earnings Growth Analysis
Earnings Trend: ADS's earnings have grown by 13.5% per year over the past 5 years.
Accelerating Growth: ADS's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.
Earnings vs Industry: ADS had negative earnings growth (-40.5%) over the past year, making it difficult to compare to the IT industry average (13.4%).
Return on Equity
High ROE: Whilst ADS's Return on Equity (36.05%) is high, this metric is skewed due to their high level of debt.
Next Steps
Financial Health
How is Alliance Data Systems's financial position?
Financial Position Analysis
Short Term Liabilities: ADS's short term assets ($24.1B) exceed its short term liabilities ($11.9B).
Long Term Liabilities: ADS's short term assets ($24.1B) exceed its long term liabilities ($13.0B).
Debt to Equity History and Analysis
Debt Level: ADS's debt to equity ratio (1403.1%) is considered high.
Reducing Debt: ADS's debt to equity ratio has increased from 539.5% to 1403.1% over the past 5 years.
Debt Coverage: ADS's debt is not well covered by operating cash flow (5.5%).
Interest Coverage: ADS's interest payments on its debt are well covered by EBIT (8.1x coverage).
Balance Sheet
Inventory Level: ADS has a low level of unsold assets or inventory.
Debt Coverage by Assets: ADS's debt is covered by short term assets (assets are 1.1x debt).
Next Steps
Dividend
What is Alliance Data Systems's current dividend yield, its reliability and sustainability?
7.35%
Current Dividend Yield
Dividend Yield vs Market
Notable Dividend: ADS's dividend (6.91%) is higher than the bottom 25% of dividend payers in the US market (1.98%).
High Dividend: ADS's dividend (6.91%) is in the top 25% of dividend payers in the US market (5.49%)
Stability and Growth of Payments
Stable Dividend: Whilst dividend payments have been stable, ADS has been paying a dividend for less than 10 years.
Growing Dividend: ADS's dividend payments have increased, but the company has only paid a dividend for 3 years.
Current Payout to Shareholders
Dividend Coverage: With its low payout ratio (22.4%), ADS's dividend payments are well covered by earnings.
Future Payout to Shareholders
Future Dividend Coverage: ADS's dividends in 3 years are forecast to be thoroughly covered by earnings (11.7% payout ratio).
Next Steps
Management
How experienced are the management team and are they aligned to shareholders interests?
1.2yrs
Average management tenure
CEO
Ralph Andretta (57yo)
no data
Tenure
Mr. Ralph J. Andretta is Chief Executive officer, President and Director at Alliance Data Systems Corporation since February 3, 2020. Mr. Andretta served as managing director and head of U.S. cards busines ...
Leadership Team
| Name | Position | Tenure | Compensation | Ownership |
|---|---|---|---|---|
| Executive VP & Senior Advisor | 1.17yrs | US$2.96m | 0.012% $188.7k | |
| CEO, President & Director | no data | no data | no data | |
| Executive VP & CFO | 0.67yr | no data | 0.0057% $92.6k | |
| Senior VP & Chief Accounting Officer | 10yrs | no data | 0.049% $803.1k | |
| Executive VP | 0.67yr | no data | 0.0093% $151.9k | |
| Chief Risk Officer | 2yrs | no data | no data | |
| Chief Marketing Officer of Card Services Business for Alliance Data | no data | no data | no data | |
| Senior VP & Treasurer | 5.17yrs | no data | 0.0099% $161.2k | |
| Interim Chief Executive Officer of BrandLoyalty | 0.58yr | no data | no data | |
| Investor Relations | no data | no data | no data |
1.2yrs
Average Tenure
56.5yo
Average Age
Experienced Management: ADS's management team is not considered experienced ( 1.2 years average tenure), which suggests a new team.
Board Members
| Name | Position | Tenure | Compensation | Ownership |
|---|---|---|---|---|
| CEO, President & Director | no data | no data | no data | |
| Independent Director | 23.58yrs | US$251.85k | 1.55% $25.3m | |
| Non-Executive Chairman | 10.25yrs | US$422.53k | 0.24% $3.9m | |
| Independent Director | 19yrs | US$286.18k | 0.016% $257.9k | |
| Independent Director | 19yrs | US$255.26k | 0.15% $2.4m | |
| Independent Director | 3.42yrs | US$254.76k | no data | |
| Independent Director | 0.67yr | no data | 0.0056% $92.1k | |
| Independent Director | 4.67yrs | US$271.13k | 0.019% $306.6k |
10.3yrs
Average Tenure
64.5yo
Average Age
Experienced Board: ADS's board of directors are seasoned and experienced ( 10.3 years average tenure).
Ownership
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: ADS 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
Alliance Data Systems Corporation's company bio, employee growth, exchange listings and data sources
Key Information
- Name: Alliance Data Systems Corporation
- Ticker: ADS
- Exchange: NYSE
- Founded: 1996
- Industry: Data Processing and Outsourced Services
- Sector: Software
- Market Cap: US$1.634b
- Shares outstanding: 47.63m
- Website: https://www.alliancedata.com
Number of Employees
Location
- Alliance Data Systems Corporation
- 3075 Loyalty Circle
- Columbus
- Ohio
- 43219
- United States
Listings
| Ticker | Exchange | Primary Security | Security Type | Country | Currency | Listed on |
|---|---|---|---|---|---|---|
| ADS | NYSE (New York Stock Exchange) | Yes | Common Stock | US | USD | Jun 2001 |
| LID | DB (Deutsche Boerse AG) | Yes | Common Stock | DE | EUR | Jun 2001 |
| LID | BST (Boerse-Stuttgart) | Yes | Common Stock | DE | EUR | Jun 2001 |
| 0HCR | LSE (London Stock Exchange) | Yes | Common Stock | GB | USD | Jun 2001 |
| LID | BRSE (Berne Stock Exchange) | Yes | Common Stock | CH | CHF | Jun 2001 |
| ADS1 * | BMV (Bolsa Mexicana de Valores) | Yes | Common Stock | MX | MXN | Jun 2001 |
| A1LL34 | BOVESPA (Bolsa de Valores de Sao Paulo) | BDR EACH 4 REPR 1 COM | BR | BRL | Jan 2020 |
Biography
Alliance Data Systems Corporation provides data-driven marketing and loyalty solutions worldwide. It operates through three segments: LoyaltyOne, Epsilon, and Card Services. The company offers a portfolio of integrated outsourced marketing solutions, including customer loyalty programs, database marketing services, end-to-end marketing services, analytics and creative services, direct marketing services, and private label and co-brand retail credit card programs. It also focuses on facilitating and managing interactions between its clients and their customers through various consumer marketing channels, including in-store, online, email, social media, mobile, direct mail, and telephone. The company captures and analyzes data created during each customer interaction, leveraging the insight derived from that data to enable clients to identify and acquire new customers and to enhance customer loyalty. It serves clients across various end-markets, including financial services, specialty retail, grocery and drugstore chains, petroleum retail, automotive, hospitality and travel, telecommunications, insurance, and healthcare. Alliance Data Systems Corporation was founded in 1996 and is headquartered in Columbus, Ohio.
Company Analysis and Financial Data Status
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2020/03/31 00:33 |
| End of Day Share Price | 2020/03/30 00:00 |
| Earnings | 2019/12/31 |
| Annual Earnings | 2019/12/31 |
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.