NYSE:LINX

Stock Analysis Report

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Executive Summary

Linx S.A., through its subsidiaries, provides management software solutions for the retail market in Brazil and internationally.


Snowflake Analysis

Flawless balance sheet with reasonable growth potential.

Share Price & News

How has Linx's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: LINX's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

22.1%

LINX

-2.3%

US Software

0.5%

US Market


1 Year Return

-23.3%

LINX

42.3%

US Software

18.7%

US Market

Return vs Industry: LINX underperformed the US Software industry which returned 42.3% over the past year.

Return vs Market: LINX underperformed the US Market which returned 18.7% over the past year.


Shareholder returns

LINXIndustryMarket
7 Day22.1%-2.3%0.5%
30 Day29.3%0.9%4.9%
90 Day81.0%15.0%19.8%
1 Year-22.9%-23.3%43.1%42.3%21.2%18.7%
3 Yearn/a150.3%142.2%46.2%36.8%
5 Yearn/a258.3%237.5%85.3%65.1%

Price Volatility Vs. Market

How volatile is Linx's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Linx undervalued compared to its fair value and its price relative to the market?

1927.09x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: LINX ($5.92) is trading above our estimate of fair value ($2.15)

Significantly Below Fair Value: LINX is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: LINX is poor value based on its PE Ratio (1927.1x) compared to the US Software industry average (54.6x).

PE vs Market: LINX is poor value based on its PE Ratio (1927.1x) compared to the US market (19.1x).


Price to Earnings Growth Ratio

PEG Ratio: LINX is poor value based on its PEG Ratio (38.4x)


Price to Book Ratio

PB vs Industry: LINX is good value based on its PB Ratio (3.3x) compared to the US Software industry average (7.4x).


Next Steps

Future Growth

How is Linx forecast to perform in the next 1 to 3 years based on estimates from 11 analysts?

50.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: LINX's forecast earnings growth (50.2% per year) is above the savings rate (2.2%).

Earnings vs Market: LINX's earnings (50.2% per year) are forecast to grow faster than the US market (24.1% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: LINX's revenue (14.3% per year) is forecast to grow faster than the US market (9.5% per year).

High Growth Revenue: LINX's revenue (14.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: LINX's Return on Equity is forecast to be low in 3 years time (6.8%).


Next Steps

Past Performance

How has Linx performed over the past 5 years?

-12.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: LINX has high quality earnings.

Growing Profit Margin: LINX's current net profit margins (0.4%) are lower than last year (7.7%).


Past Earnings Growth Analysis

Earnings Trend: LINX's earnings have declined by 12.8% per year over the past 5 years.

Accelerating Growth: LINX's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: LINX had negative earnings growth (-94.7%) over the past year, making it difficult to compare to the Software industry average (11.5%).


Return on Equity

High ROE: LINX's Return on Equity (0.2%) is considered low.


Next Steps

Financial Health

How is Linx's financial position?


Financial Position Analysis

Short Term Liabilities: LINX's short term assets (R$1.0B) exceed its short term liabilities (R$439.9M).

Long Term Liabilities: LINX's short term assets (R$1.0B) exceed its long term liabilities (R$364.4M).


Debt to Equity History and Analysis

Debt Level: LINX's debt to equity ratio (12%) is considered satisfactory.

Reducing Debt: LINX's debt to equity ratio has reduced from 13.8% to 12% over the past 5 years.

Debt Coverage: LINX's debt is well covered by operating cash flow (38.5%).

Interest Coverage: LINX earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet


Next Steps

Dividend

What is Linx current dividend yield, its reliability and sustainability?

0.37%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: LINX's dividend (0.37%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.59%).

High Dividend: LINX's dividend (0.37%) is low compared to the top 25% of dividend payers in the US market (4.31%).


Stability and Growth of Payments

Stable Dividend: LINX is not paying a notable dividend for the US market, therefore no need to check if payments are stable.

Growing Dividend: LINX 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: LINX is not paying a notable dividend for the US market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of LINX'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?

3.0yrs

Average management tenure


CEO

Alberto Menache (47 yo)

16.58yrs

Tenure

Mr. Alberto Menache serves as the Chief Executive Officer of Linx S.A. since 2004. He has been Vice Chairman of the Board and Director at Linx S.A. since April 07, 2017 and April 03, 2013 respectively. Whe ...


Leadership Team

NamePositionTenureCompensationOwnership
Nercio Jose Fernandes
Chairman & Advisorno datano data6.12%
R$ 64.6m
Alberto Menache
CEO & Vice Chairman of the Board16.58yrsno data4.82%
R$ 51.0m
Antonio Ramatis Rodrigues
VP of Finance & DRI Director and Member of Executive Board0.83yrno datano data
Jean Klaumann
Vice President of Operations7.5yrsno datano data
Gilsinei Hansen
Vice President of Operations1.58yrsno datano data
Denis Nieto Piovezan
Vice President of Operations0.83yrno datano data
Flavio Menezes
Vice President of Marketing & Human Resource3.25yrsno datano data
Dennis Herszkowicz
Executive Vice President2.83yrsno datano data
Denis Piovezan
Executive Directorno datano datano data
Carolina Pontes
Investor Relations Managerno datano datano data

3.0yrs

Average Tenure

47yo

Average Age

Experienced Management: LINX's management team is considered experienced (3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Nercio Jose Fernandes
Chairman & Advisorno datano data6.12%
R$ 64.6m
Alberto Menache
CEO & Vice Chairman of the Board16.58yrsno data4.82%
R$ 51.0m
Marcelo Moraes
Member of the Fiscal Councilno datano datano data
Joao Adamo Junior
Member of the Fiscal Councilno datano datano data
Alon Dayan
Director7.33yrsno data3.9%
R$ 41.3m
Joao Cox
Independent Director5.5yrsno datano data
Roger de Barbosa Ingold
Independent Director4.33yrsno datano data
Flavio Maia Luz
Member of the Fiscal Councilno datano datano data

5.5yrs

Average Tenure

57yo

Average Age

Experienced Board: LINX's board of directors are considered experienced (5.5 years average tenure).


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.


Ownership Breakdown

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


Top Shareholders

Company Information

Linx S.A.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Linx S.A.
  • Ticker: LINX
  • Exchange: NYSE
  • Founded: 1985
  • Industry: Application Software
  • Sector: Software
  • Market Cap: R$5.679b
  • Listing Market Cap: R$1.057b
  • Shares outstanding: 177.57m
  • Website: https://www.linx.com.br

Location

  • Linx S.A.
  • Avenida Doutora Ruth Cardoso, 7221
  • 7º Andar
  • São Paulo
  • São Paulo
  • 05425-902
  • Brazil

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
LINX3BOVESPA (Bolsa de Valores de Sao Paulo)YesCommon SharesBRBRLFeb 2013
LINXNYSE (New York Stock Exchange)SPONSORED ADSUSUSDJun 2019

Biography

Linx S.A., through its subsidiaries, provides management software solutions for the retail market in Brazil and internationally. It offers enterprise resource planning (ERP), and point of sale or point of ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/08/14 11:18
End of Day Share Price2020/08/13 00:00
Earnings2020/06/30
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.