Sotheby's Stock Analysis (NYSE:BID)

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$47.36 $0.61 (1.27%) BID stock closing price Apr 28, 2017 (Closing)
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Sotheby's
Updated on : Apr 28, 2017
previous close
BID 47.4 (0%)
S&P 500 2384.2 (0%)
Closing Price On: Apr 28, 2017
stock rating
RATING: ★★★★★★★★★★ (0/5)
Industry :
Auction Valuation services
Sector :
Business Services
5 Quarter Revenue
Revenue Growth
2016-Q4
$million
%
YOY GROWTH
Compared to the industry
Long Term Growth
5 Year CAGR:
-0.6%
Operating Profit
Operating Margin:
15.2%
Sector Average:
9.3%
5 Quarter Net Profit
Net Margins
2016-Q4
%
LTM Margin
Compared to the industry
Debt/Equity Ratio
Debt:
1.17B
Debt/Equity Ratio:
 2.32
Compared to the industry
Cash Flow
Operating cash flow:
$258.2M
Net Income:
$65.5M
PROS      CONS
Operating Margins
Cash Flow
FCF Margin
Long Term Growth
Net Margins
High Debt Burden
PE Valuation
PS Valuation
Rating: ★★★★★★★★★★ (0/5)
Relative Valuation
BID PS :
3.2
Industry PS :
1.7
Sector:   Business Services.   *PE adjusted for one time items.
Other Metrics
Return on Invested Capital:
7.3%
Return on Equity:
12.3%
Free Cash Flow Margin:
82.1%
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Sotheby's Analysis Video

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View Sotheby's stock analysis video. This is our BID analyst opinion covering the buy and sell arguments for BID stock.

Sothebys Stock Rating (3/5)

Our Sotheby's stock opinion is based on fundamentals of the company. This Sotheby's stock analysis is based on latest Q4 earnings for 2016. The stock price analysis takes into account a company's valuation metrics.

Should you buy BID stock?

  • Sotheby's had a healthy average operating margin of 15.2% over the last 4 quarters.
  • The company has an operating cash flow which is 3.9 times the net income. We see this as a positive signal.
  • The company has a good Free Cash Flow (FCF) margin of 82.1%.

Should you sell BID stock?

  • Revenue declined at a CAGR of -0.6% over the last 5 years.
  • Sotheby's's LTM Net margins were poor at 9.2%.
  • Sotheby's has a debt/equity ratio of  2.32, which is worse than the average in the Business Services sector.
  • Trading at a PE ratio of 27.4, BID stock is overvalued in comparison to industry average multiple of 21.7.
  • The company is trading at a price to sales multiple of 3.2, which is overvalued in comparison to the Auction Valuation services industry average multiple of 1.7.

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