Vonage Holdings has the Financial Strength Rank of 3. It displays poor financial strength and is likely in financial distress. Usually this is caused by too much debt for the company.
Warning Sign:
Vonage Holdings Corp displays poor financial strength. Usually this is caused by too much debt for the company.
GuruFocus Financial Strength Rank measures how strong a company's financial situation is. It is based on these factors:
1. The debt burden that the company has as measured by its
Interest Coverage (current year). The higher, the better.
2. Debt to revenue ratio. The lower, the better.
3.
Altman Z-Score.
Vonage Holdings did not have earnings to cover the interest expense.
Vonage Holdings's debt to revenue ratio for the quarter that ended in Sep. 2020 was 1.77.
As of today, Vonage Holdings's Altman Z-Score is 2.67.
Competitive Comparison
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap.
Vonage Holdings Financial Strength Distribution
* The bar in red indicates where Vonage Holdings's Financial Strength falls into.
Vonage Holdings Financial Strength Calculation
GuruFocus Financial Strength Rank measures how strong a company's financial situation is. It is based on these factors
A company ranks high with financial strength is likely to withstand any business slowdowns and recessions.
1. The debt burden that the company has as measured by its Interest Coverage (current year). The higher, the better.
Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.
Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:
Vonage Holdings's Interest Expense for the
months ended in Sep. 2020 was $-7 Mil. Its Operating Income for the
months ended in Sep. 2020 was $-11 Mil. And its Long-Term Debt & Capital Lease Obligation for the quarter that ended in Sep. 2020 was $549 Mil.
Vonage Holdings's Interest Coverage for the quarter that ended in Sep. 2020 is
| Vonage Holdings did not have earnings to cover the interest expense. |
The higher the ratio, the stronger the company's financial strength is.
2. Debt to revenue ratio. The lower, the better.
Vonage Holdings's Debt to Revenue Ratio for the quarter that ended in Sep. 2020 is
3. Altman Z-Score.
Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations.
The zones of discrimination were as such:
When Z-Score is less than 1.81, it is in Distress Zones.
When Z-Score is greater than 2.99, it is in Safe Zones.
When Z-Score is between 1.81 and 2.99, it is in Grey Zones.
Vonage Holdings has a Z-score of 2.67, indicating it is in Grey Zones. This implies that Vonage Holdings is in some kind of financial stress. If it is below 1.81, the company may faces bankrupcy risk.
Warning Sign:
Altman Z-score of 2.67 is in grey area. The implies that the company is in some kind of financial stress. If it is below 1.8, the company may faces bankrupcy risk.
* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.
Vonage Holdings Financial Strength Headlines
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