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
Rewards
Risk Analysis
Earnings are forecast to decline by an average of 6.9% per year for the next 3 years
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
| ADS | Industry | Market | |
|---|---|---|---|
| 7 Day | 0.04% | -0.7% | -0.6% |
| 30 Day | 11.2% | -5.5% | -1.8% |
| 90 Day | 40.2% | -4.8% | 0.2% |
| 1 Year | 175.6%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
1 week ago | Simply Wall St
Have Alliance Data Systems Corporation (NYSE:ADS) Insiders Been Selling Their Stock?2 weeks ago | Simply Wall St
The Alliance Data Systems (NYSE:ADS) Share Price Has Gained 122%, So Why Not Pay It Some Attention?1 month ago | Simply Wall St
Be Wary Of Alliance Data Systems (NYSE:ADS) And Its Returns On CapitalValuation
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
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2021/05/17 22:58 |
| End of Day Share Price | 2021/05/17 00:00 |
| Earnings | 2021/03/31 |
| Annual Earnings | 2020/12/31 |
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.