The stock is currently priced at US$136 on the market compared to my intrinsic value of $106.73. SiteOne Landscape Supply appears to be overvalued by 27% at the moment, based on my discounted cash flow valuation. But what if there is still an opportunity to buy? Today I will analyse the most recent data on SiteOne Landscape Supply’s outlook and valuation to see if the opportunity still exists.Ĭheck out our latest analysis for SiteOne Landscape Supply What Is SiteOne Landscape Supply Worth? As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. ( NYSE:SITE) might not be the most widely known stock at the moment, it saw a double-digit share price rise of over 10% in the past couple of months on the NYSE. In light of that, we think it's worth looking further into this stock because if SiteOne Landscape Supply can keep these trends up, it could have a bright future ahead.While SiteOne Landscape Supply, Inc. Since the stock has returned a solid 64% to shareholders over the last five years, it's fair to say investors are beginning to recognize these changes. In summary, it's great to see that SiteOne Landscape Supply can compound returns by consistently reinvesting capital at increasing rates of return, because these are some of the key ingredients of those highly sought after multi-baggers. What We Can Learn From SiteOne Landscape Supply's ROCE The increasing returns on a growing amount of capital is common amongst multi-baggers and that's why we're impressed. The amount of capital employed has increased too, by 180%. Over the last five years, returns on capital employed have risen substantially to 19%. The trends we've noticed at SiteOne Landscape Supply are quite reassuring.
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If you'd like to see what analysts are forecasting going forward, you should check out our free report for SiteOne Landscape Supply.
In the above chart we have measured SiteOne Landscape Supply's prior ROCE against its prior performance, but the future is arguably more important. See our latest analysis for SiteOne Landscape Supply On its own, that's a standard return, however it's much better than the 15% generated by the Trade Distributors industry. Thus, SiteOne Landscape Supply has an ROCE of 19%. Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)Ġ.19 = US$370m ÷ (US$2.6b - US$613m) (Based on the trailing twelve months to July 2022). Analysts use this formula to calculate it for SiteOne Landscape Supply: Return On Capital Employed (ROCE): What Is It?įor those who don't know, ROCE is a measure of a company's yearly pre-tax profit (its return), relative to the capital employed in the business. So on that note, SiteOne Landscape Supply ( NYSE:SITE) looks quite promising in regards to its trends of return on capital. Basically this means that a company has profitable initiatives that it can continue to reinvest in, which is a trait of a compounding machine. Did you know there are some financial metrics that can provide clues of a potential multi-bagger? Firstly, we'd want to identify a growing return on capital employed (ROCE) and then alongside that, an ever-increasing base of capital employed.
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