NYSE:SWCH

Stock Analysis Report

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Executive Summary

Switch, Inc., through its subsidiary, Switch, Ltd., provides colocation space and related services primarily to technology and digital media companies in the United States. More Details


Snowflake Analysis

Proven track record with moderate growth potential.


Similar Companies

Share Price & News

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


Latest Share Price and Events

Stable Share Price: SWCH is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: SWCH's weekly volatility (5%) has been stable over the past year.


Market Performance


7 Day Return

2.5%

SWCH

-5.7%

US IT

-2.7%

US Market


1 Year Return

6.8%

SWCH

16.3%

US IT

21.2%

US Market

Return vs Industry: SWCH underperformed the US IT industry which returned 20.6% over the past year.

Return vs Market: SWCH underperformed the US Market which returned 24.3% over the past year.


Shareholder returns

SWCHIndustryMarket
7 Day2.5%-5.7%-2.7%
30 Day5.0%-6.1%1.8%
90 Day16.3%11.4%16.4%
1 Year7.9%6.8%17.4%16.3%23.9%21.2%
3 Year8.2%5.6%77.1%70.6%43.7%34.2%
5 Yearn/a194.5%174.7%124.3%99.2%

Long-Term Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

129.25x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: SWCH ($17.13) is trading above our estimate of fair value ($9.45)

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


Price To Earnings Ratio

PE vs Industry: SWCH is poor value based on its PE Ratio (129.2x) compared to the US IT industry average (36.8x).

PE vs Market: SWCH is poor value based on its PE Ratio (129.2x) compared to the US market (21.2x).


Price to Earnings Growth Ratio

PEG Ratio: SWCH is poor value based on its PEG Ratio (3.9x)


Price to Book Ratio

PB vs Industry: SWCH is overvalued based on its PB Ratio (7.7x) compared to the US IT industry average (5x).


Next Steps

Future Growth

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

33.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SWCH's forecast earnings growth (33.2% per year) is above the savings rate (2%).

Earnings vs Market: SWCH's earnings (33.2% per year) are forecast to grow faster than the US market (21.3% per year).

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

Revenue vs Market: SWCH's revenue (9.7% per year) is forecast to grow slower than the US market (10.6% per year).

High Growth Revenue: SWCH's revenue (9.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SWCH's Return on Equity is forecast to be low in 3 years time (9.4%).


Next Steps

Past Performance

How has Switch performed over the past 5 years?

-34.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SWCH has high quality earnings.

Growing Profit Margin: SWCH's current net profit margins (2.6%) are higher than last year (1.7%).


Past Earnings Growth Analysis

Earnings Trend: SWCH's earnings have declined by 34.8% per year over the past 5 years.

Accelerating Growth: SWCH's earnings growth over the past year (76.6%) exceeds its 5-year average (-34.8% per year).

Earnings vs Industry: SWCH earnings growth over the past year (76.6%) exceeded the IT industry 4.2%.


Return on Equity

High ROE: SWCH's Return on Equity (5.9%) is considered low.


Next Steps

Financial Health

How is Switch's financial position?


Financial Position Analysis

Short Term Liabilities: SWCH's short term assets ($180.8M) exceed its short term liabilities ($115.2M).

Long Term Liabilities: SWCH's short term assets ($180.8M) do not cover its long term liabilities ($1.4B).


Debt to Equity History and Analysis

Debt Level: SWCH's debt to equity ratio (167.9%) is considered high.

Reducing Debt: Insufficient data to determine if SWCH's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: SWCH's debt is well covered by operating cash flow (22%).

Interest Coverage: SWCH's interest payments on its debt are not well covered by EBIT (1.8x coverage).


Balance Sheet


Next Steps

Dividend

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

1.17%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: SWCH's dividend (1.17%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.39%).

High Dividend: SWCH's dividend (1.17%) is low compared to the top 25% of dividend payers in the US market (3.87%).


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (104.3%), SWCH's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SWCH's dividends in 3 years are forecast to be covered by earnings (74.9% payout ratio).


Next Steps

Management

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

3.6yrs

Average management tenure


CEO

Rob Roy (51 yo)

3.58yrs

Tenure

US$7,500,429

Compensation

Mr. Rob Roy founded Switch, Inc. in June 13, 2017 and has been its Chief Executive Officer and Chairman since June 13, 2017. Mr. Roy has been Chief Executive Officer and as Chairman of the Board of Switch,...


CEO Compensation Analysis

Compensation vs Market: Rob's total compensation ($USD7.50M) is above average for companies of similar size in the US market ($USD5.03M).

Compensation vs Earnings: Rob's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Rob Roy
Founder3.58yrsUS$7.50m0.79%
$ 33.3m
Erin Morton
President3.58yrsUS$3.59m0.33%
$ 13.9m
Gabriel Nacht
Chief Financial Officer3.58yrsUS$2.11m0.056%
$ 2.4m
Lesley McVay
Chief Operations Officerno datano datano data
Jennifer Arias
Vice President of Accounting & Controllerno datano datano data
Eddie Schutter
Chief Technology Officerno datano datano data
Melissa Young
Chief Information Officer0.83yrno data0.055%
$ 2.3m
Matthew Heinz
Vice President of Investor Relations and Financial Planning & Analysisno datano datano data
Rob Elliott
Senior Vice President of Government & Public Affairsno datano datano data
Heather Ellerbe
Vice President of Marketingno datano datano data
Jessica Battaglia
Vice President of Human Resourcesno datano datano data
David Glover
General Manager of EAST Campusno datano datano data

3.6yrs

Average Tenure

51yo

Average Age

Experienced Management: SWCH's management team is considered experienced (3.6 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Rob Roy
Founder3.58yrsUS$7.50m0.79%
$ 33.3m
Donald Snyder
Lead Independent Directorno dataUS$312.50k0.12%
$ 5.1m
Liane Pelletier
Director0.17yrno data0.0067%
$ 283.7k
Bryan Wolf
Independent Director3.58yrsUS$287.50k0.023%
$ 978.8k
Zareh Sarrafian
Independent Director3.58yrsUS$283.75k0.036%
$ 1.5m
Kimberly Sheehy
Independent Director3.08yrsUS$290.00k0.036%
$ 1.5m
Thomas Thomas
Director3.58yrsUS$293.75k2.25%
$ 94.7m
Angela Archon
Director0.17yrno data0.0067%
$ 283.7k

3.6yrs

Average Tenure

58yo

Average Age

Experienced Board: SWCH's board of directors are considered experienced (3.6 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: SWCH insiders have only sold shares 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

Switch, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Switch, Inc.
  • Ticker: SWCH
  • Exchange: NYSE
  • Founded: 2000
  • Industry: Internet Services and Infrastructure
  • Sector: Software
  • Implied Market Cap: US$4.210b
  • Market Cap: US$2.014b
  • Shares outstanding: 248.66m
  • Website: https://www.switch.com

Number of Employees


Location

  • Switch, Inc.
  • 7135 South Decatur Boulevard
  • Las Vegas
  • Nevada
  • 89118
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SWCHNYSE (New York Stock Exchange)YesClass A Common SharesUSUSDOct 2017
821DB (Deutsche Boerse AG)YesClass A Common SharesDEEUROct 2017

Biography

Switch, Inc., through its subsidiary, Switch, Ltd., provides colocation space and related services primarily to technology and digital media companies in the United States. It develops and operates data ce...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/01/27 23:47
End of Day Share Price2021/01/27 00:00
Earnings2020/09/30
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.