Ubiquiti Inc. (UI) stock analysis

P/E above its 5-year median

Ubiquiti's P/E of 38.4 is above its own 5-year median of 37.9.

P/E above the industry

Ubiquiti's P/E of 38.4 is above the Communications Equipment median of 24.9.

EV/EBITDA below its 5-year median

Ubiquiti's EV/EBITDA of 30.2 is below its 5-year median of 30.3.

P/B above the industry

Ubiquiti's price-to-book of 24.41 is above the Communications Equipment median of 2.54.

Trading above fair value

The share price of $679.42 is above our fair value estimate of $562.80.

Margin of safety under 20%

The price is 20.7% above fair value, so there is no margin of safety.

Revenue growing 10%+ a year

Revenue grew 19.0% a year over the last three fiscal years.

EPS growing 10%+ a year

Diluted EPS grew 33.0% a year over the last three fiscal years.

Earnings growth accelerating

Net income grew 35.5% over the last twelve months, against a 5-year average of 9.3% a year.

Growing faster than the industry

Revenue grew 29.4% over the last twelve months; the Communications Equipment median is 10.9%.

Company guidance

No outlook found in earnings releases from the last twelve months.

Gross margin improving

Gross margin was 46.5% over the last twelve months, against 44.4% a year earlier.

Return on equity

Needs positive equity and five years of results.

Return on capital over 10%

Return on invested capital was 131%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Ubiquiti's return on equity of 85.4% is above the Communications Equipment median of -3.7%.

Earnings grew over 5 years

Net income grew 9.3% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 30.1% over the last twelve months, against a 5-year average of 23.7%.

Net margin above the industry

Ubiquiti's net margin of 30.1% is above the Communications Equipment median of -2.2%.

No debt

Ubiquiti has no borrowings on its latest balance sheet.

Debt not rising

With no debt today, leverage cannot have risen.

Debt covered by cash flow

There is no debt to cover.

Interest well covered

No meaningful interest expense to cover.

Short-term assets cover short-term debts

Current assets are 3.13 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 35.02; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Ubiquiti paid dividends worth 0.5% of the share price over the last twelve months.

Yield below Treasuries

The 0.5% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Ubiquiti yields 0.5%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 9 fiscal years.

Covered by earnings

Dividends take 19.2% of net income.

Covered by free cash flow

Dividends take 20.0% of free cash flow.