- By GF Value
The stock of FLIR Systems (NAS:FLIR, 30-year Financials) gives every indication of being fairly valued, according to GuruFocus Value calculation. GuruFocus Value is GuruFocus' estimate of the fair value at which the stock should be traded. It is calculated based on the historical multiples that the stock has traded at, the past business growth and analyst estimates of future business performance. If the price of a stock is significantly above the GF Value Line, it is overvalued and its future return is likely to be poor. On the other hand, if it is significantly below the GF Value Line, its future return will likely be higher. At its current price of $57.73 per share and the market cap of $7.6 billion, FLIR Systems stock is believed to be fairly valued. GF Value for FLIR Systems is shown in the chart below.
Because FLIR Systems is fairly valued, the long-term return of its stock is likely to be close to the rate of its business growth, which averaged 4% over the past three years and is estimated to grow 2.82% annually over the next three to five years.
Link: These companies may deliever higher future returns at reduced risk.
Investing in companies with poor financial strength has a higher risk of permanent loss of capital. Thus, it is important to carefully review the financial strength of a company before deciding whether to buy its stock. Looking at the cash-to-debt ratio and interest coverage is a great starting point for understanding the financial strength of a company. FLIR Systems has a cash-to-debt ratio of 0.40, which is worse than 81% of the companies in Hardware industry. GuruFocus ranks the overall financial strength of FLIR Systems at 6 out of 10, which indicates that the financial strength of FLIR Systems is fair. This is the debt and cash of FLIR Systems over the past years:
Investing in profitable companies carries less risk, especially in companies that have demonstrated consistent profitability over the long term. Typically, a company with high profit margins offers better performance potential than a company with low profit margins. FLIR Systems has been profitable 10 years over the past 10 years. During the past 12 months, the company had revenues of $1.9 billion and earnings of $1.61 a share. Its operating margin of 18.08% better than 91% of the companies in Hardware industry. Overall, GuruFocus ranks FLIR Systems's profitability as fair. This is the revenue and net income of FLIR Systems over the past years: