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NIC Inc. EGOV

NIC Inc. Financial Ratios 2020-2011 | EGOV

Brief overview of NIC Inc.'s market valuation

The review covers five available annual periods spanning 2016 to 2020.

The current valuation set is P/E 26.25x (median 26.25x), EV/EBITDA 15.38x (median 15.33x), P/S 3.91x (median 3.85x). The multiple basket looks neutral against its history, differing from median levels by roughly +0.4%.

The inverse P/E implies an earnings yield of 3.8%. This is not a dividend yield, but current earnings relative to market price.

Capital efficiency is characterized by ROE 23.4%, ROA 14.8%, ROCE 28.5%. Returns on capital and assets point to efficient economics and a strong internal source of growth.

On PEG (0.71x), valuation is restrained relative to growth, but one ratio cannot replace cash-flow and risk analysis.

The cash conversion cycle shortened from 139.4 days to 77.8 days, or 61.6 days. Working capital returns faster.

Overall picture

NIC Inc. trades near its familiar ratio range. A new earnings or profitability trend is needed to change the view.

Annual Financial Ratios NIC Inc.

2020 2019 2018 2017 2016 2015 2014 2013 2012 2011

P/E

26.2 27.1 16.2 21.6 29.2 30.9 27.4 43.9 40.2 34.5

P/S

3.9 3.9 2.7 3.3 5.1 4.4 3.9 5.6 5.0 4.4

EV/EBITDA

15.4 15.3 8.9 11.2 17.8 15.8 13.6 21.9 20.0 16.8

PEG

0.71 -1.88 1.3 -2.71 0.91 4.46 1.29 2.1 2.88 1.44

P/B

6.1 5.5 4.4 6.6 12.2 11.2 10.3 15.3 13.4 12.2

P/CF

35.3 24.5 18.0 19.7 23.2 28.6 24.1 43.1 71.0 32.9

ROE %

23.40 20.51 27.53 30.68 41.70 36.25 37.51 34.85 33.37 35.25

ROA %

14.77 13.92 18.76 17.45 23.18 17.40 22.57 17.80 18.15 15.89

ROCE %

28.54 23.85 33.90 44.35 55.19 56.05 57.80 54.40 52.47 57.92

DSO

123.3 88.0 85.6 112.7 95.0 100.3 77.1 77.3 95.5 99.5

DPO

102.0 107.1 107.5 161.9 143.6 128.5 93.9 96.8 123.9 151.1

All numbers in USD currency

Multiples are an important financial analysis tool for the company NIC Inc., allowing investors and analysts to quickly assess the company’s value and investment attractiveness based on the ratio of market indicators to the company’s financial performance. Essentially, multiples express how the market values the company relative to its earnings, revenue, equity, or other key metrics.

Advantages of Using Financial Ratios
  • Simplified Data Analysis
    Financial ratios transform large volumes of accounting data into compact and easily interpretable indicators, significantly simplifying the assessment of the company’s condition.
  • Comparability Between Companies
    Multiples standardize financial metrics, enabling objective comparison of companies of different sizes, industries, and market capitalizations.
  • Identification of Trends and Issues
    Regular analysis of ratios helps track the dynamics of financial health, identify strengths and weaknesses of the business, as well as potential risks.
  • Decision Support
    Financial multiples serve as an important tool for investors, creditors, and company management in making investment, credit, and managerial decisions.
  • Accelerated Assessment of Investment Attractiveness
    Ratios allow quick determination of key performance, liquidity, and financial stability indicators, facilitating prompt evaluation of companies’ attractiveness for investments.

Using multiples enables comparison between companies, even if they differ in size or industry, as they standardize financial data into ratios convenient for analysis. This is especially useful for evaluating companies where direct analysis of financial statements may be complex or require in-depth knowledge.

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