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Alliance Data Systems

Market Cap

US$6.0b

Last Updated

2021/05/17 22:58 UTC

Data Sources

Company Financials +

Executive Summary

Alliance Data Systems Corporation provides data-driven marketing, loyalty, and payment solutions in the United States, Canada, Europe, the Middle East, Africa, the Asia Pacific, and internationally. More Details


Snowflake Analysis

Undervalued with proven track record.


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 is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 7% a week.

Volatility Over Time: ADS's weekly volatility (7%) has been stable over the past year.


Market Performance


7 Day Return

0.04%

ADS

-0.7%

US IT

-0.6%

US Market


1 Year Return

172.4%

ADS

34.7%

US IT

46.0%

US Market

Return vs Industry: ADS exceeded the US IT industry which returned 39% over the past year.

Return vs Market: ADS exceeded the US Market which returned 50.8% over the past year.


Shareholder returns

ADSIndustryMarket
7 Day0.04%-0.7%-0.6%
30 Day11.2%-5.5%-1.8%
90 Day40.2%-4.8%0.2%
1 Year175.6%172.4%35.9%34.7%48.4%46.0%
3 Year-39.8%-42.6%89.6%82.9%60.5%50.4%
5 Year-36.6%-40.5%200.2%179.7%125.9%100.9%

Long-Term 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

Valuation

Is Alliance Data Systems undervalued compared to its fair value and its price relative to the market?

34.4%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: ADS ($122.1) is trading below our estimate of fair value ($186.19)

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 (10.7x) compared to the US IT industry average (34.6x).

PE vs Market: ADS is good value based on its PE Ratio (10.7x) compared to the US market (19.8x).


Price to Earnings Growth Ratio

PEG Ratio: ADS's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: ADS is good value based on its PB Ratio (3.4x) compared to the US IT industry average (4.8x).


Future Growth

How is Alliance Data Systems forecast to perform in the next 1 to 3 years based on estimates from 14 analysts?

-6.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ADS's earnings are forecast to decline over the next 3 years (-6.9% per year).

Earnings vs Market: ADS's earnings are forecast to decline over the next 3 years (-6.9% per year).

High Growth Earnings: ADS's earnings are forecast to decline over the next 3 years.

Revenue vs Market: ADS's revenue (4.1% per year) is forecast to grow slower than the US market (9% per year).

High Growth Revenue: ADS's revenue (4.1% 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 (24.1%)


Past Performance

How has Alliance Data Systems performed over the past 5 years?

-2.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ADS has high quality earnings.

Growing Profit Margin: ADS's current net profit margins (13%) are higher than last year (7.4%).


Past Earnings Growth Analysis

Earnings Trend: ADS's earnings have declined by 2.5% per year over the past 5 years.

Accelerating Growth: ADS's earnings growth over the past year (32.9%) exceeds its 5-year average (-2.5% per year).

Earnings vs Industry: ADS earnings growth over the past year (32.9%) exceeded the IT industry 19.1%.


Return on Equity

High ROE: Whilst ADS's Return on Equity (31.24%) is high, this metric is skewed due to their high level of debt.


Financial Health

How is Alliance Data Systems's financial position?


Financial Position Analysis

Short Term Liabilities: ADS's short term assets ($18.3B) exceed its short term liabilities ($10.7B).

Long Term Liabilities: ADS's short term assets ($18.3B) exceed its long term liabilities ($8.7B).


Debt to Equity History and Analysis

Debt Level: ADS's debt to equity ratio (940.1%) is considered high.

Reducing Debt: ADS's debt to equity ratio has increased from 928.8% to 940.1% over the past 5 years.

Debt Coverage: ADS's debt is not well covered by operating cash flow (11%).

Interest Coverage: ADS's interest payments on its debt are well covered by EBIT (8.3x coverage).


Balance Sheet


Dividend

What is Alliance Data Systems's current dividend yield, its reliability and sustainability?

0.69%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: ADS's dividend (0.69%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.24%).

High Dividend: ADS's dividend (0.69%) is low compared to the top 25% of dividend payers in the US market (3.42%).


Stability and Growth of Payments

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

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


Future Payout to Shareholders

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

2.1yrs

Average management tenure


CEO

Ralph Andretta (58 yo)

1.25yrs

Tenure

US$12,299,988

Compensation

Mr. Ralph J. Andretta has been Chief Executive officer, President and Director at Alliance Data Systems Corporation since February 3, 2020. From 2011 to November 2019, Mr. Andretta served as managing dire...


CEO Compensation Analysis

Compensation vs Market: Ralph's total compensation ($USD12.30M) is above average for companies of similar size in the US market ($USD6.51M).

Compensation vs Earnings: Insufficient data to compare Ralph's compensation with company performance.


Leadership Team

Experienced Management: ADS's management team is considered experienced (2.1 years average tenure).


Board Members

Experienced Board: ADS's board of directors are not considered experienced ( 1.3 years average tenure), which suggests a new board.


Ownership

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


Insider Trading Volume

Insider Buying: ADS insiders have only sold shares 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 4.4%.


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$5.997b
  • Shares outstanding: 49.72m
  • Website: https://www.alliancedata.com

Number of Employees


Location

  • Alliance Data Systems Corporation
  • 3075 Loyalty Circle
  • Columbus
  • Ohio
  • 43219
  • United States

Listings


Biography

Alliance Data Systems Corporation provides data-driven marketing, loyalty, and payment solutions in the United States, Canada, Europe, the Middle East, Africa, the Asia Pacific, and internationally. It ope...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/05/17 22:58
End of Day Share Price2021/05/17 00:00
Earnings2021/03/31
Annual Earnings2020/12/31


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.