Gates Industrial Current Valuation vs. Return On Equity

GTES Stock  USD 22.16  0.04  0.18%   
Taking into consideration Gates Industrial's profitability measurements, Gates Industrial may not be well positioned to generate adequate gross income at this time. It has a very high probability of underperforming in December. Profitability indicators assess Gates Industrial's ability to earn profits and add value for shareholders. At this time, Gates Industrial's Price To Sales Ratio is comparatively stable compared to the past year. EV To Sales is likely to gain to 1.50 in 2024, whereas Sales General And Administrative To Revenue is likely to drop 0.19 in 2024. At this time, Gates Industrial's Income Tax Expense is comparatively stable compared to the past year. Non Operating Income Net Other is likely to gain to about 15.9 M in 2024, whereas Operating Income is likely to drop slightly above 315.5 M in 2024.
Current ValueLast YearChange From Last Year 10 Year Trend
Gross Profit Margin0.30.32
Notably Down
Slightly volatile
For Gates Industrial profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Gates Industrial to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well Gates Industrial utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between Gates Industrial's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of Gates Industrial over time as well as its relative position and ranking within its peers.
  

Gates Industrial's Revenue Breakdown by Earning Segment

Check out Risk vs Return Analysis.
For more information on how to buy Gates Stock please use our How to Invest in Gates Industrial guide.
Is Industrial Machinery & Supplies & Components space expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Gates Industrial. If investors know Gates will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Gates Industrial listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth
(0.38)
Earnings Share
0.83
Revenue Per Share
13.107
Quarterly Revenue Growth
(0.05)
Return On Assets
0.0908
The market value of Gates Industrial is measured differently than its book value, which is the value of Gates that is recorded on the company's balance sheet. Investors also form their own opinion of Gates Industrial's value that differs from its market value or its book value, called intrinsic value, which is Gates Industrial's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Gates Industrial's market value can be influenced by many factors that don't directly affect Gates Industrial's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Gates Industrial's value and its price as these two are different measures arrived at by different means. Investors typically determine if Gates Industrial is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Gates Industrial's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.

Gates Industrial Return On Equity vs. Current Valuation Fundamental Analysis

Comparative valuation techniques use various fundamental indicators to help in determining Gates Industrial's current stock value. Our valuation model uses many indicators to compare Gates Industrial value to that of its competitors to determine the firm's financial worth.
Gates Industrial is rated below average in current valuation category among its peers. It is rated below average in return on equity category among its peers . The ratio of Current Valuation to Return On Equity for Gates Industrial is about  119,297,455,631 . At this time, Gates Industrial's Return On Equity is comparatively stable compared to the past year. Comparative valuation analysis is a catch-all technique that is used if you cannot value Gates Industrial by discounting back its dividends or cash flows. It compares the stock's price multiples to nearest competition to determine if the stock is relatively undervalued or overvalued.

Gates Current Valuation vs. Competition

Gates Industrial is rated below average in current valuation category among its peers. After adjusting for long-term liabilities, total market size of Industrials industry is currently estimated at about 130.47 Billion. Gates Industrial holds roughly 7.56 Billion in current valuation claiming about 6% of equities under Industrials industry.

Gates Return On Equity vs. Current Valuation

Enterprise Value is a firm valuation proxy that approximates the current market value of a company. It is typically used to determine the takeover or merger price of a firm. Unlike Market Cap, this measure takes into account the entire liquid asset, outstanding debt, and exotic equity instruments that the company has on its balance sheet. When a takeover occurs, the parent company will have to assume the target company's liabilities but will take possession of all cash and cash equivalents.

Gates Industrial

Enterprise Value

 = 

Market Cap + Debt

-

Cash

 = 
7.56 B
Enterprise Value can be a useful tool to compare companies with different capital structures. Long term liability and current cash or cash equivalents can have a huge impact on market valuation of a given company.
Return on Equity or ROE tells company stockholders how effectually their money is being utilized or reinvested. It is a useful ratio when analyzing company profitability or the management effectiveness given the capital invested by the shareholders. ROE shows how efficiently a company utilizes investments to generate income.

Gates Industrial

Return On Equity

 = 

Net Income

Total Equity

 = 
0.0634
For most industries, Return on Equity between 10% and 30% are considered desirable to provide dividends to owners and have funds for the future growth of the company. Investors should be very careful using ROE as the only efficiency indicator because ROE can be high if a company is heavily leveraged.

Gates Return On Equity Comparison

Gates Industrial is currently under evaluation in return on equity category among its peers.

Gates Industrial Profitability Projections

The most important aspect of a successful company is its ability to generate a profit. For investors in Gates Industrial, profitability is also one of the essential criteria for including it into their portfolios because, without profit, Gates Industrial will eventually generate negative long term returns. The profitability progress is the general direction of Gates Industrial's change in net profit over the period of time. It can combine multiple indicators of Gates Industrial, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
Last ReportedProjected for Next Year
Accumulated Other Comprehensive Income-828.5 M-869.9 M
Operating Income462.6 M315.5 M
Net Income From Continuing Ops278 M235.5 M
Income Before Tax285.3 M148.6 M
Total Other Income Expense Net-177.3 M-168.4 M
Net Income Applicable To Common Shares253.9 M198.6 M
Net Income256.4 M237.3 M
Income Tax Expense28.3 M29.7 M
Interest Income10.7 M10.2 M
Net Interest Income-154.6 M-162.3 M
Non Operating Income Net Other15.2 M15.9 M
Change To Netincome-23.5 M-24.6 M
Net Income Per Share 0.89  0.85 
Income Quality 1.26  2.15 
Net Income Per E B T 0.77  0.85 

Gates Profitability Driver Comparison

Profitability drivers are factors that can directly affect your investment outlook on Gates Industrial. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of Gates Industrial position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the Gates Industrial's important profitability drivers and their relationship over time.

Use Gates Industrial in pair-trading

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Gates Industrial position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Gates Industrial will appreciate offsetting losses from the drop in the long position's value.

Gates Industrial Pair Trading

Gates Industrial Pair Trading Analysis

The ability to find closely correlated positions to Gates Industrial could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Gates Industrial when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Gates Industrial - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Gates Industrial to buy it.
The correlation of Gates Industrial is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Gates Industrial moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Gates Industrial moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Gates Industrial can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
Pair CorrelationCorrelation Matching

Use Investing Themes to Complement your Gates Industrial position

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Insurance
Insurance Theme
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Additional Tools for Gates Stock Analysis

When running Gates Industrial's price analysis, check to measure Gates Industrial's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Gates Industrial is operating at the current time. Most of Gates Industrial's value examination focuses on studying past and present price action to predict the probability of Gates Industrial's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Gates Industrial's price. Additionally, you may evaluate how the addition of Gates Industrial to your portfolios can decrease your overall portfolio volatility.