Cadre, is this companies intrinsic value higher than its stock price?, Does it have a good PS and PE rating?
8/9/2024 09:54am
**Cadre Holdings' Intrinsic Value and Financial Ratios**:
1. **Intrinsic Value Assessment**:
- **Revenue and Market Position**: Cadre Holdings is a global leader in the manufacturing and distribution of safety equipment, targeting end-users such as law enforcement, first responders, and military personnel.
- **Financial Stability and Growth Potential**: The company has achieved record quarterly net sales and gross profit, with a reaffirmed full-year guidance.
- **Valuation Metrics**: To fully assess intrinsic value, one would need to consider metrics like the Price-to-Earnings (P/E) ratio, Price-to-Sales (P/S) ratio, and discounted cash flow (DCF) analysis.
2. **Comparing Intrinsic Value to Stock Price**:
- **Current Stock Price**: Cadre Holdings' stock is trading below the estimated fair value, with a P/E ratio lower than the industry average.
- **Intrinsic Value Determination**: A comprehensive analysis using various valuation metrics would involve evaluating the company's financial performance, growth prospects, and industry conditions.
3. **Investment Suitability**:
- **Strategic Position**: Cadre's focus on high-margin safety products and its industry positioning could be advantageous.
- **Financial Ratios**:
- **Gross Profit Margin**: 41.8% for the quarter ended March 31, 2024
- **Net Income**: $6.9 million, or $0.18 per diluted share, for the quarter ended March 31, 2024
- **Adjusted EBITDA**: $24.5 million for the quarter ended March 31, 2024
- **Adjusted EBITDA Margin**: 17.8% for the quarter ended March 31, 2024
4. **Valuation Ratios**:
- **P/S Ratio**: 2.52 as of August 8, 2024.
- **P/E Ratio**: 36 as of August 8, 2024.
**Conclusion**: Cadre Holdings appears to have a strong market position and financial performance, but a more in-depth analysis using various valuation metrics is necessary to determine if the intrinsic value of the company's stock is higher than its current market price. The P/S ratio is lower than the industry average, suggesting potential undervaluation, while the P/E ratio is higher than the industry average, indicating higher growth expectations from investors. Prospective investors should also consider the risks associated with the industry and the company's future performance.