Quad/Graphics Inc. (QUAD) Company Overview & Stock Price Forecast
This article provides a brief analysis and stock rating for Quad Graphics (QUAD) including an updated stock price target. Additional data on the company’s earnings yield, price/earnings ratio, return on invested capital and YTD performance are discussed as well.
Quad Graphics Fundamentals
Stock Price Target: $9.12
In the section below, we discuss the earnings yield, P/E, return on invested capital and YTD performance for Quad Graphics in comparison to the Publishing industry and the S&P 500.
Quad Graphics is a Small Cap company with a Market Cap of $241.4M.
How are investors using Quad Graphics earnings yield to assess the company?
The earnings yield is used to show the percentage of a company’s earnings per share. Investors typically use earnings yield to determine which assets are underpriced or overpriced relative to other variables, like sector, industry or bond yields. Simply put, the earnings yield of a company can be used to assess how expensive a company is in relation to the earnings that are generated. When valuing companies, the SIS Research Group does not utilize the inverse P/E ratio to calculate the earnings yield. Instead, we use an adjusted earning yield calculation to capture variation amongst companies (i.e. debt and tax rates).
The current earnings yield for Quad Graphics is 24.75%, in comparison to 3.39% for the S&P 500 and 1.63% for the 10-year treasury bond. The median earnings yield for the Publishing industry is 8.35%.
What does Quad Graphics Price-to-Earnings Ratio (P/E) tell investors about the company?
The price-to-earnings ratio (P/E) is a relatively popular metric used by investors and analysts for valuing a company’s stock. The P/E ratio can be used to show how a stock’s valuation compares to other companies and the total market. Investors use the P/E ratio to determine what the market is willing to pay today based on a company’s past or future earnings. A high P/E ratio could mean that a stock’s price is too high relative to earnings, which could be a signal that a stock is currently overvalued. In turn, a low P/E ratio could indicate that a company’s current stock price is low relative to earnings.
Quad Graphics does not currently have a reported P/E. The P/E for the Publishing industry is 48.94 and the P/E for the S&P 500 is 29.17.
What is the current Price-to-Sales Ratio (P/S) for Quad Graphics?
The Price-to-Sales Ratio (P/S) looks at a company’s market cap and revenue to determine valuation. The P/S ratio is calculated by taking a company’s market cap and dividing by the total sales or revenue. The P/S ratio gives an idea of how much the market values every dollar of a company’s sales and can be effective in valuing unprofitable growth stocks or companies that are currently undergoing special situations or challenges. A lower the P/S ratio can be an indicator of good value.
Quad Graphics is currently trading at a P/S of 0.07. The P/S for the Publishing industry is 0.83 and the P/S for the S&P 500 is 3.17.
How does Quad Graphics Price-to-BookRatio (P/B) compare to the Publishing industry?
Price-to-book value (P/B) is the ratio of the market value of a company’s shares divided by its book value of equity (the value of it’s assets on the books). The book value is the difference between the book value of assets and liabilities. Typically, investors use the P/B ratio to assess if a stock is valued properly (a value of one means that the stock price is trading in line with the book value of the company). A company with a high P/B ratio could mean the stock price is overvalued as well as the converse.
Quad Graphics P/B ratio is 2.75. The P/B for the Publishing industry is 2.07 and the P/B for the S&P 500 is 4.93.
How attractive is Quad Graphics Return on Invested Capital (ROIC) to investors?
Investors use the return on invested capital (ROIC) to assess how efficient a company is at turning capital into profits. The ROIC is the amount of money a company makes on it’s investments that is above the average cost of debt and equity.
Investors can use the ROIC to provide context for metrics like the (P/E) ratio. For instance, when used in isolation a low P/E ratio could suggest a company is oversold but the decline could be because a company is no longer generating value for shareholders. Conversely, companies that consistently generate high rates of ROIC can plausibly trade at a premium compared to other stocks, even if their P/E ratios are high.
Quad Graphics ROIC is currently -2.70% in comparison to 8.33% for the Publishing industry and 8.60% for the S&P 500.
What is Quad Graphics YTD Performance in comparison to its industry and the total market?
The year-to-date (YTD) performance is the amount of profit/loss realized by a stock since the first trading day of the current calendar year.
The YTD performance for Quad Graphics is 12.57%. The Publishing industry has a YTD performance of 29.17% in comparison to the YTD S&P 500 performance of 25.02%.
Recent Financial Results (Q3 ’21)
- Net sales increased by 4% from Q3 2020, driven by higher print volumes, including print segment share gains from new clients, and a continued positive trend in Agency Solutions net sales
- Net earnings increased by $12M to $14M during Q3 2021 as compared to 2020
- 6% increase in Adjusted EBITDA to $64M compared to the same quarter in 2020
- Net debt reduction by $140M or 15% YoY
- Reaffirmed the full year financial outlook for 2021 Net Sales, Adjusted EBITDA and Debt Leverage
- Amended $1B bank debt agreement to November 2026
Stock Price Target: $9.12
Quad Graphics provides marketing solutions worldwide. The company operates in US Print and Related Services and International segments. Quad offers printing services, specialty printed products and paper procurement services. The company also provides marketing, digital and print execution, and logistics.
The company was founded in 1971 and is headquartered in Sussex, Wisconsin. The current CEO is Joel Quadracci.
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This material is provided for informational purposes only and is not financial advice. The information contained herein should not solely be used for the formation of an investment decision, whether you are a long term or short term investor.