With a recent daily loss of 6.53%, yet a 3-month gain of 5.06%, investors are closely monitoring LiveRamp Holdings Inc (RAMP, Financial). The company's Loss Per Share stands at 0.89, prompting questions about its valuation: Is the stock Fairly Valued? This article delves into the financials and market position of LiveRamp Holdings to provide a comprehensive valuation analysis. Read on to understand the intricacies of its market value and future prospects.
Company Introduction
LiveRamp Holdings Inc (RAMP, Financial) operates in the cloud-based software sphere, specializing in data integration for businesses and advertisers. By merging first-party customer data across various touchpoints with additional sources, LiveRamp Holdings enhances customer profile accuracy for its clients. The company's revenue is primarily generated through a subscription model, complemented by a marketplace for data transactions. A comparison between LiveRamp Holdings' stock price and the GuruFocus Fair Value (GF Value) of $35.14 suggests an opportunity to gauge the stock's intrinsic value.
Summarize GF Value
The GF Value is a calculated intrinsic value of a stock, factoring in historical trading multiples, company performance, and future business estimates. LiveRamp Holdings (RAMP, Financial), with its current share price of $33.65 and a market cap of $2.20 billion, is estimated to be fairly valued. The GF Value suggests that the stock price should align with the company's growth rate, indicating that LiveRamp Holdings may offer a stable investment reflecting its business development.
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Financial Strength
Investors must consider a company's financial strength to avoid potential capital loss. LiveRamp Holdings boasts a cash-to-debt ratio of 11.39, indicating a strong balance sheet with financial resilience. This positions LiveRamp Holdings advantageously within the competitive Software industry landscape.
Profitability and Growth
Consistent profitability is a less risky investment indicator. LiveRamp Holdings has a mixed profitability record, with an operating margin that ranks below many peers in the Software industry. However, the company's growth metrics are more promising, with revenue and EBITDA growth rates surpassing a majority of its competitors, indicating potential for value creation.
ROIC vs. WACC
Comparing Return on Invested Capital (ROIC) with Weighted Average Cost of Capital (WACC) is crucial for assessing profitability. LiveRamp Holdings currently has a negative ROIC when compared to its WACC, suggesting challenges in generating sufficient cash flow relative to capital invested. This comparison is vital for evaluating the company's efficiency in creating shareholder value.
Conclusion
In summary, LiveRamp Holdings (RAMP, Financial) is estimated to be fairly valued. The company's strong financial condition and fair profitability, coupled with better-than-average industry growth rates, present a balanced investment opportunity. For a detailed financial overview, investors can explore LiveRamp Holdings' 30-Year Financials here.
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
