NYSE:ADS

Stock Analysis Report

Alliance Data Systems

Executive Summary

Alliance Data Systems Corporation provides data-driven marketing and loyalty solutions worldwide.

Snowflake

Fundamentals

Good value with mediocre balance sheet.


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


Market Performance


7 Day Return

-2.6%

ADS

0.2%

US IT

-0.2%

US Market


1 Year Return

-47.7%

ADS

14.6%

US IT

1.1%

US Market

ADS underperformed the IT industry which returned 14.6% over the past year.

ADS underperformed the Market in United States of America which returned 1.1% over the past year.


Share holder returns

ADSIndustryMarket
7 Day-2.6%0.2%-0.2%
30 Day-5.7%-1.7%2.5%
90 Day-5.1%1.5%1.6%
1 Year-46.8%-47.7%15.8%14.6%3.4%1.1%
3 Year-37.9%-40.0%96.6%88.5%45.2%35.8%
5 Year-45.7%-47.6%146.3%121.5%62.6%44.8%

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 month ago | Simply Wall St

Why Alliance Data Systems Corporation (NYSE:ADS) Should Be In Your Dividend Portfolio

Valuation

Is Alliance Data Systems undervalued based on future cash flows and its price relative to the stock market?

7.92x

Price to Earnings (PE) ratio


Intrinsic Value Based on Future Cash Flows

Alliance Data Systems's share price is above the future cash flow value, it's not available at a moderate discount (< 20%).

Alliance Data Systems's share price is above the future cash flow value, it's not available at a substantial discount (< 40%).


Price Based on Earnings

Alliance Data Systems is good value based on earnings compared to the US IT industry average.

Alliance Data Systems is good value based on earnings compared to the United States of America market.


Price Based on Expected Growth

Alliance Data Systems is good value based on expected growth next year.


Price Based on Value of Assets

Alliance Data Systems is good value based on assets compared to the US IT industry average.


Next Steps

Future Growth

How is Alliance Data Systems expected to perform in the next 1 to 3 years based on estimates from 20 analysts?

8.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Alliance Data Systems's revenue is expected to grow by 4.9% yearly, however this is not considered high growth (20% yearly).

Alliance Data Systems's earnings are expected to grow by 8.2% yearly, however this is not considered high growth (20% yearly).

Alliance Data Systems's revenue growth is positive but not above the United States of America market average.

Alliance Data Systems's earnings growth is positive but not above the United States of America market average.

Alliance Data Systems's earnings growth is expected to exceed the low risk savings rate of 2.7%.


Earnings per Share Growth Estimates


Future Return on Equity

Alliance Data Systems is expected to efficiently use shareholders’ funds in the future (Return on Equity greater than 20%).


Next Steps

Past Performance

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

15.7%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Alliance Data Systems's year on year earnings growth rate has been positive over the past 5 years.

Alliance Data Systems's 1-year earnings growth is negative, it can't be compared to the 5-year average.

Alliance Data Systems's 1-year earnings growth is negative, it can't be compared to the US IT industry average.


Return on Equity

Whilst Alliance Data Systems has efficiently used shareholders’ funds last year (Return on Equity greater than 20%), this is metric is skewed due to its high level of debt.


Return on Assets

Alliance Data Systems used its assets less efficiently than the US IT industry average last year based on Return on Assets.


Return on Capital Employed

Alliance Data Systems's use of capital deteriorated last year versus 3 years ago (Return on Capital Employed).


Next Steps

Financial Health

How is Alliance Data Systems's financial position?


Financial Position Analysis

Alliance Data Systems is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.

Alliance Data Systems's cash and other short term assets cover its long term commitments.


Debt to Equity History and Analysis

Alliance Data Systems's level of debt (1048.9%) compared to net worth is high (greater than 40%).

The level of debt compared to net worth has increased over the past 5 years (796.9% vs 1048.9% today).

Debt is not well covered by operating cash flow (10.1%, less than 20% of total debt).

Interest payments on debt are well covered by earnings (EBIT is 5.1x coverage).


Balance Sheet

Low level of unsold assets.

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?

1.94%

Expected Dividend Yield


Dividend Yield and Payments Analysis

Alliance Data Systems's pays a higher dividend yield than the bottom 25% of dividend payers in United States of America (1.44%).

Alliance Data Systems's dividend is below the markets top 25% of dividend payers in United States of America (3.71%).

Whilst dividend payments have been stable, Alliance Data Systems has been paying a dividend for less than 10 years.

Dividend payments have increased, but Alliance Data Systems only paid a dividend in the past 3 years.


Current Payout to Shareholders

Dividends paid are thoroughly covered by earnings (6.9x coverage).


Future Payout to Shareholders

Dividends after 3 years are expected to be thoroughly covered by earnings (9.9x coverage).


Next Steps

Management

What is the CEO of Alliance Data Systems's salary, the management and board of directors tenure and is there insider trading?

0.3yrs

Average management tenure


CEO

Melisa Miller (60yo)

0.3yrs

Tenure

US$3,654,015

Compensation

Ms. Melisa A. Miller has been President, Chief Executive Officer and Director at Alliance Data Systems Corp. since June 05, 2019. She served as Executive Vice President and President of Card Services at Al ...


CEO Compensation Analysis

Melisa's remuneration is lower than average for companies of similar size in United States of America.

Melisa's compensation has been consistent with company performance over the past year, both up more than 20%.


Management Age and Tenure

0.3yrs

Average Tenure

56.5yo

Average Age

The average tenure for the Alliance Data Systems management team is less than 2 years, this suggests a new team.


Board Age and Tenure

4.3yrs

Average Tenure

62yo

Average Age

The tenure for the Alliance Data Systems board of directors is about average.


Insider Trading

Alliance Data Systems individual insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$406,37001 Aug 19
Timothy King
EntityIndividual
Role
Chief Financial Officer
Executive VP & CFO
Shares2,600
Max PriceUS$156.30
SellUS$39,719,50030 Nov 18
ValueAct Capital Management L.P.
EntityCompany
Shares200,000
Max PriceUS$199.10
SellUS$135,000,00008 Nov 18
ValueAct Capital Management L.P.
EntityCompany
Shares675,000
Max PriceUS$200.00

Ownership Breakdown


Management Team

  • Charles Horn (58yo)

    Executive VP & Vice Chairman

    • Tenure: 0.7yrs
    • Compensation: US$2.96m
  • Joseph Motes (57yo)

    Executive VP

    • Tenure: 0.3yrs
  • Claudia Mennen-Vermeule (46yo)

    Interim Chief Executive Officer of BrandLoyalty

    • Tenure: 0.08yrs
  • Laura Santillan (47yo)

    Senior VP & Chief Accounting Officer

    • Tenure: 9.6yrs
  • Melisa Miller (60yo)

    President

    • Tenure: 0.3yrs
    • Compensation: US$3.65m
  • Jami Dewolf

    Chief Marketing Officer of Card Services Business for Alliance Data

    • Tenure: 0yrs
  • Jeff Chesnut

    Senior VP & Treasurer

    • Tenure: 0yrs
  • Tiffany Louder

    Investor Relations

    • Tenure: 0yrs
  • Greg Betchkal

    Chief Risk Officer

    • Tenure: 1.6yrs
  • Tim King (56yo)

    Executive VP & CFO

    • Tenure: 0.3yrs

Board Members

  • Bruce Anderson (79yo)

    Director

    • Tenure: 23.1yrs
    • Compensation: US$251.85k
  • Rob Minicucci (67yo)

    Non-Executive Chairman

    • Tenure: 9.8yrs
    • Compensation: US$422.53k
  • Roger Ballou (68yo)

    Director

    • Tenure: 18.6yrs
    • Compensation: US$286.18k
  • Ken Jensen (75yo)

    Director

    • Tenure: 18.6yrs
    • Compensation: US$255.26k
  • Tim Theriault (58yo)

    Director

    • Tenure: 2.9yrs
    • Compensation: US$254.76k
  • Kelly Barlow (50yo)

    Director

    • Tenure: 2.3yrs
    • Compensation: US$253.76k
  • Sharen Turney (62yo)

    Director

    • Tenure: 0.3yrs
  • Laurie Tucker (62yo)

    Director

    • Tenure: 4.3yrs
    • Compensation: US$271.13k
  • Melisa Miller (60yo)

    President

    • Tenure: 0.3yrs
    • Compensation: US$3.65m

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$5.995b
  • Shares outstanding: 46.05m
  • Website: https://www.alliancedata.com

Number of Employees


Location

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

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ADSNYSE (New York Stock Exchange)YesCommon StockUSUSDJun 2001
LIDDB (Deutsche Boerse AG)YesCommon StockDEEURJun 2001
LIDBST (Boerse-Stuttgart)YesCommon StockDEEURJun 2001
0HCRLSE (London Stock Exchange)YesCommon StockGBUSDJun 2001

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  ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/09/20 23:31
End of Day Share Price2019/09/20 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


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.