Brief Commentary On Alliance Data Systems Corporation’s (NYSE:ADS) Fundamentals

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Alliance Data Systems Corporation (NYSE:ADS) is a stock with outstanding fundamental characteristics. When we build an investment case, we need to look at the stock with a holistic perspective. In the case of ADS, it is a company with a a great history of performance, trading at a great value. In the following section, I expand a bit more on these key aspects. For those interested in understanding where the figures come from and want to see the analysis, take a look at the report on Alliance Data Systems here.

Undervalued with proven track record

Over the past year, ADS has grown its earnings by 17%, with its most recent figure exceeding its annual average over the past five years. Not only did ADS outperformed its past performance, its growth also surpassed the IT industry expansion, which generated a 8.5% earnings growth. This is an notable feat for the company. ADS’s share price is trading at below its true value, meaning that the market sentiment for the stock is currently bearish. Investors have the opportunity to buy into the stock to reap capital gains, if ADS’s projected earnings trajectory does follow analyst consensus growth, which determines my intrinsic value of the company. Compared to the rest of the it industry, ADS is also trading below its peers, relative to earnings generated. This supports the theory that ADS is potentially underpriced.

NYSE:ADS Income Statement, June 12th 2019
NYSE:ADS Income Statement, June 12th 2019

Next Steps:

For Alliance Data Systems, I’ve put together three fundamental factors you should further research:

  1. Future Outlook: What are well-informed industry analysts predicting for ADS’s future growth? Take a look at our free research report of analyst consensus for ADS’s outlook.
  2. Financial Health: Are ADS’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of ADS? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.