I've been keeping an eye on SDL plc (LON:SDL) because I'm attracted to its fundamentals. Looking at the company as a whole, as a potential stock investment, I believe SDL has a lot to offer. Basically, it is a company with impressive financial health as well as an optimistic future outlook. In the following section, I expand a bit more on these key aspects. For those interested in digging a bit deeper into my commentary, take a look at the report on SDL here.
Flawless balance sheet with reasonable growth potential
One reason why investors are attracted to SDL is its earnings growth potential in the near future of 21%, made up of high-quality, operational cash from its core business, which is expected to increase by 67% next year. This indicates a high-quality bottom-line expansion, as opposed to those driven by unsustainable cost-cutting activities. SDL's strong financial health means that all of its upcoming liability payments are able to be met by its current cash and short-term investment holdings. This implies that SDL manages its cash and cost levels well, which is an important determinant of the company’s health. SDL seems to have put its debt to good use, generating operating cash levels of 2.28x total debt in the most recent year. This is also a good indication as to whether debt is properly covered by the company’s cash flows.
For SDL, there are three essential aspects you should further research:
- Historical Performance: What has SDL's returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
- Valuation: What is SDL worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether SDL is currently mispriced by the market.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of SDL? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.