SNAP

Financial health: Fair5.6/10

5 strengths, 4 concerns. Weakest points: debt to equity, net debt vs cash flow, return on equity and 1 more.

• Debt to equity: 1.55 (Concern, benchmark < 0.5) — Debt of 1.55x equity is high against the 0.5x benchmark. It has been broadly flat over the last 4 years.
• Net debt vs cash flow: 5.7y (Concern, benchmark < 4 years) — Net debt of $2.5B is 5.7x annual free cash flow — about 6 years of cash flow to repay.
• Current ratio: 3.56 (Strong, benchmark > 1.5) — Short-term assets cover 3.56x short-term liabilities, against Graham's 1.5x floor. It has deteriorated over the last 4 years.
• Return on equity: -20.2% (Concern, benchmark > 15%) — Earns -20.2% on shareholder equity, well short of the > 15% mark.
• Gross margin: 57.3% (Strong, benchmark > 40%) — Keeps 57.3% of revenue after the direct cost of sales, comfortably past the > 40% mark.
• Net margin: -7.8% (Concern, benchmark > 10%) — Turns -7.8% of revenue into profit, well short of the > 10% mark.
• Free cash flow: $437.2M (Strong, benchmark positive) — Generated $437.2M of free cash flow after capital spending. It has improved over the last 4 years.
• Revenue growth: 10.6% (Strong, benchmark > 10%) — Revenue changed 10.6% year on year, comfortably past the > 10% mark.
• Earnings growth: 34.0% (Strong, benchmark > 10%) — Earnings changed 34.0% year on year, comfortably past the > 10% mark.