Stock Analysis Report

Alliance Data Systems

Executive Summary

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

Snowflake Analysis

Very undervalued average dividend payer.

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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's share price has been volatile over the past 3 months.

Market Performance

7 Day Return






US Market

1 Year Return






US Market

Return vs Industry: ADS underperformed the US IT industry which returned -1.1% over the past year.

Return vs Market: ADS underperformed the US Market which returned -8.1% over the past year.

Shareholder returns

7 Day45.6%11.3%9.4%
30 Day-32.6%-5.6%-3.9%
90 Day-65.6%-13.5%-16.5%
1 Year-78.2%-78.7%3.0%2.0%-4.8%-6.8%
3 Year-82.9%-83.6%73.0%65.6%23.4%15.2%
5 Year-86.3%-86.9%101.1%83.5%41.3%25.7%

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


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


Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: ADS ($40.71) is trading below our estimate of fair value ($98.39)

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 (3.6x) compared to the IT industry average (26.2x).

PE vs Market: ADS is good value based on its PE Ratio (3.6x) compared to the US market (13.3x).

Price to Earnings Growth Ratio

PEG Ratio: ADS is good value based on its PEG Ratio (0.3x)

Price to Book Ratio

PB vs Industry: ADS is good value based on its PB Ratio (1.2x) compared to the US IT industry average (3x).

Next Steps

Future Growth

How is Alliance Data Systems forecast to perform in the next 1 to 3 years based on estimates from 15 analysts?


Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: ADS's forecast earnings growth (12.1% per year) is above the savings rate (1.7%).

Earnings vs Market: ADS's earnings (12.1% per year) are forecast to grow slower than the US market (13.3% per year).

High Growth Earnings: ADS's earnings are forecast to grow, but not significantly.

Revenue vs Market: ADS's revenue is expected to decline over the next 3 years (-0.9% per year).

High Growth Revenue: ADS's revenue is forecast to decline over the next 3 years (-0.9% 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 (35.8%)

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Past Performance

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


Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: ADS has a large one-off loss of $190.0M impacting its December 31 2019 financial results.

Growing Profit Margin: ADS's current net profit margins (10.1%) are lower than last year (16.7%).

Past Earnings Growth Analysis

Earnings Trend: ADS's earnings have grown by 13.5% 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 (-40.5%) over the past year, making it difficult to compare to the IT industry average (13.7%).

Return on Equity

High ROE: Whilst ADS's Return on Equity (36.05%) 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 ($24.1B) exceed its short term liabilities ($11.9B).

Long Term Liabilities: ADS's short term assets ($24.1B) exceed its long term liabilities ($13.0B).

Debt to Equity History and Analysis

Debt Level: ADS's debt to equity ratio (1403.1%) is considered high.

Reducing Debt: ADS's debt to equity ratio has increased from 539.5% to 1403.1% over the past 5 years.

Debt Coverage: ADS's debt is not well covered by operating cash flow (5.5%).

Interest Coverage: ADS's interest payments on its debt are well covered by EBIT (8.1x coverage).

Balance Sheet

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


Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: ADS's dividend (6.19%) is higher than the bottom 25% of dividend payers in the US market (1.89%).

High Dividend: ADS's dividend (6.19%) is in the top 25% of dividend payers in the US market (5.26%)

Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, ADS has been paying a dividend for less than 10 years.

Growing Dividend: ADS's dividend payments have increased, but the company has only paid a dividend for 3 years.

Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (22.4%), 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 (12.1% payout ratio).

Next Steps


How experienced are the management team and are they aligned to shareholders interests?


Average management tenure


Ralph Andretta (57yo)



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

Charles Horn
Executive VP & Senior Advisor1.25yrsUS$2.96m0.012% $212.2k
Ralph Andretta
CEO, President & Director0.17yrno datano data
Timothy King
Executive VP & CFO0.83yrno data0.0057% $104.2k
Laura Santillan
Senior VP & Chief Accounting Officer10.17yrsno data0.049% $903.3k
Joseph Motes
Executive VP0.83yrno data0.0093% $170.9k
Greg Betchkal
Chief Risk Officer2.17yrsno datano data
Jami Dewolf
Chief Marketing Officer of Card Services Business for Alliance Datano datano datano data
John Chesnut
Senior VP & Treasurer5.25yrsno data0.0099% $181.4k
Claudia Mennen-Vermeule
Interim Chief Executive Officer of BrandLoyalty0.67yrno datano data
Tiffany Louder
Investor Relationsno datano datano data


Average Tenure


Average Age

Experienced Management: ADS's management team is not considered experienced ( 1 years average tenure), which suggests a new team.

Board Members

Ralph Andretta
CEO, President & Director0.17yrno datano data
Bruce Anderson
Independent Director23.67yrsUS$251.85k1.55% $28.4m
Robert Minicucci
Non-Executive Chairman10.33yrsUS$422.53k0.24% $4.3m
Roger Ballou
Independent Director19.17yrsUS$286.18k0.016% $290.1k
Kenneth Jensen
Independent Director19.17yrsUS$255.26k0.15% $2.7m
Timothy Theriault
Independent Director3.5yrsUS$254.76kno data
Sharen Turney
Independent Director0.83yrno data0.0056% $103.6k
Laurie Tucker
Independent Director4.83yrsUS$271.13k0.019% $344.9k


Average Tenure


Average Age

Experienced Board: ADS's board of directors are considered experienced (7.6 years average tenure).


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

Insider Trading Volume

Insider Buying: ADS insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

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$1.837b
  • Shares outstanding: 47.63m
  • Website: https://www.alliancedata.com

Number of Employees


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


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
LIDBRSE (Berne Stock Exchange)YesCommon StockCHCHFJun 2001
ADS1 *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNJun 2001
A1LL34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH 4 REPR 1 COMBRBRLJan 2020


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 of integrated outsourced marketing solutions, including customer loyalty programs, database marketing services, end-to-end marketing services, analytics and creative services, direct marketing services, and private label and co-brand retail credit card programs. It also focuses on facilitating and managing interactions between its clients and their customers through various consumer marketing channels, including in-store, online, email, social media, mobile, direct mail, and telephone. The company captures and analyzes data created during each customer interaction, leveraging the insight derived from that data to enable clients to identify and acquire new customers and to enhance customer loyalty. It serves clients across various end-markets, including financial services, specialty retail, grocery and drugstore chains, petroleum retail, automotive, hospitality and travel, telecommunications, insurance, and healthcare. Alliance Data Systems Corporation was founded in 1996 and is headquartered in Columbus, Ohio. 

Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/10 02:57
End of Day Share Price2020/04/09 00:00
Annual Earnings2019/12/31

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.