Alliance Data Systems
Market Cap
US$4.0b
Last Updated
2020/12/04 23:48 UTC
Data Sources
Company Financials +
Executive Summary
Alliance Data Systems Corporation provides data-driven marketing and loyalty solutions in the United States, Canada, Europe, the Middle East, Africa, the Asia Pacific, and others. More Details
Rewards
Risk Analysis
Snowflake Analysis
Very undervalued with reasonable growth potential.
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 +/- 11% a week.
Volatility Over Time: ADS's weekly volatility (11%) has been stable over the past year.
Market Performance
7 Day Return
12.1%
ADS
1.9%
US IT
1.5%
US Market
1 Year Return
-20.6%
ADS
30.8%
US IT
22.3%
US Market
Return vs Industry: ADS underperformed the US IT industry which returned 29.4% over the past year.
Return vs Market: ADS underperformed the US Market which returned 22.1% over the past year.
Shareholder returns
| ADS | Industry | Market | |
|---|---|---|---|
| 7 Day | 12.1% | 1.9% | 1.5% |
| 30 Day | 47.6% | 12.1% | 8.8% |
| 90 Day | 73.8% | 10.0% | 10.8% |
| 1 Year | -19.1%-20.6% | 32.1%30.8% | 25.1%22.3% |
| 3 Year | -62.4%-64.1% | 101.1%93.3% | 49.5%39.6% |
| 5 Year | -66.9%-68.8% | 191.6%171.5% | 105.8%83.3% |
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
2 days ago | Simply Wall St
Do Institutions Own Alliance Data Systems Corporation (NYSE:ADS) Shares?2 weeks ago | Simply Wall St
Should You Use Alliance Data Systems's (NYSE:ADS) Statutory Earnings To Analyse It?4 weeks ago | Simply Wall St
Only Four Days Left To Cash In On Alliance Data Systems' (NYSE:ADS) DividendValuation
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 ($83.61) is trading below our estimate of fair value ($304.69)
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 (12x) compared to the US IT industry average (36x).
PE vs Market: ADS is good value based on its PE Ratio (12x) compared to the US market (19.4x).
Price to Earnings Growth Ratio
PEG Ratio: ADS is good value based on its PEG Ratio (0.4x)
Price to Book Ratio
PB vs Industry: ADS is good value based on its PB Ratio (3x) compared to the US IT industry average (4.1x).
Next Steps
Future Growth
How is Alliance Data Systems forecast to perform in the next 1 to 3 years based on estimates from 17 analysts?
26.6%
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: ADS's forecast earnings growth (26.6% per year) is above the savings rate (2.2%).
Earnings vs Market: ADS's earnings (26.6% per year) are forecast to grow faster than the US market (21.9% per year).
High Growth Earnings: earnings are expected to grow significantly over the next 3 years.
Revenue vs Market: ADS's revenue (1.1% per year) is forecast to grow slower than the US market (10.2% per year).
High Growth Revenue: ADS's revenue (1.1% 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 (30.2%)
Next Steps
Past Performance
How has Alliance Data Systems performed over the past 5 years?
2.7%
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: ADS has high quality earnings.
Growing Profit Margin: ADS's current net profit margins (6.8%) are lower than last year (12.3%).
Past Earnings Growth Analysis
Earnings Trend: ADS's earnings have grown by 2.7% 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 (-51.7%) over the past year, making it difficult to compare to the IT industry average (3.8%).
Return on Equity
High ROE: Whilst ADS's Return on Equity (25.11%) 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 ($18.7B) exceed its short term liabilities ($10.7B).
Long Term Liabilities: ADS's short term assets ($18.7B) exceed its long term liabilities ($9.0B).
Debt to Equity History and Analysis
Debt Level: ADS's debt to equity ratio (1307.7%) is considered high.
Reducing Debt: ADS's debt to equity ratio has increased from 701.9% to 1307.7% over the past 5 years.
Debt Coverage: ADS's debt is not well covered by operating cash flow (6.8%).
Interest Coverage: ADS's interest payments on its debt are well covered by EBIT (5.5x coverage).
Balance Sheet
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Dividend
What is Alliance Data Systems's current dividend yield, its reliability and sustainability?
1.00%
Current Dividend Yield
Dividend Yield vs Market
Notable Dividend: ADS's dividend (1%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.49%).
High Dividend: ADS's dividend (1%) is low compared to the top 25% of dividend payers in the US market (4.1%).
Stability and Growth of Payments
Stable Dividend: ADS has been paying a dividend for less than 10 years and during this time payments have been volatile.
Growing Dividend: ADS has only been paying a dividend for 4 years, and since then payments have fallen.
Current Payout to Shareholders
Dividend Coverage: With its low payout ratio (24.1%), 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 (8.2% payout ratio).
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Management
How experienced are the management team and are they aligned to shareholders interests?
1.7yrs
Average management tenure
CEO
Ralph Andretta (59 yo)
0.83
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 & CFO | 1.5yrs | US$1.63m | 0.0057% $ 225.8k | |
| Senior VP & Chief Accounting Officer | 10.83yrs | US$1.55m | 0.049% $ 2.0m | |
| Executive VP | 1.5yrs | US$1.58m | 0.0093% $ 370.3k | |
| Executive VP & Senior Advisor | 1.92yrs | US$2.65m | 0.012% $ 460.0k | |
| Senior VP & Treasurer | 5.92yrs | US$1.30m | 0.0078% $ 309.6k | |
| CEO, President & Director | 0.83yr | no data | no data | |
| Chief Risk Officer | 2.83yrs | no data | no data | |
| Chief Marketing Officer of Card Services Business for Alliance Data | no data | no data | no data | |
| Interim Chief Executive Officer of BrandLoyalty | 1.33yrs | no data | no data | |
| Investor Relations | no data | no data | no data |
1.7yrs
Average Tenure
57yo
Average Age
Experienced Management: ADS's management team is not considered experienced ( 1.7 years average tenure), which suggests a new team.
Board Members
| Name | Position | Tenure | Compensation | Ownership |
|---|---|---|---|---|
| CEO, President & Director | 0.83yr | no data | no data | |
| Independent Chairman of the Board | 0.50yr | US$302.68k | 0.016% $ 628.8k | |
| Independent Director | 4.17yrs | US$247.46k | 0.0031% $ 125.3k | |
| Independent Director | 0.50yr | no data | 0.010% $ 418.2k | |
| Independent Director | 1.5yrs | US$206.46k | 0.0036% $ 144.0k | |
| Independent Director | 5.5yrs | US$247.04k | 0.0084% $ 334.4k | |
| Independent Director | 0.50yr | no data | no data |
0.8yrs
Average Tenure
63yo
Average Age
Experienced Board: ADS's board of directors are not considered experienced ( 0.8 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: 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 been diluted in the past year, with total shares outstanding growing by 3.6%.
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$3.990b
- Shares outstanding: 47.72m
- 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 |
| 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 in the United States, Canada, Europe, the Middle East, Africa, the Asia Pacific, and others. It operates through two s...
Company Analysis and Financial Data Status
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2020/12/04 23:48 |
| End of Day Share Price | 2020/12/04 00:00 |
| Earnings | 2020/09/30 |
| 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.