LiveRamp数据

LiveRamp Holdings Inc receives a 3-star quantitative star rating, illustrating our stance that this share class is a balanced choice, but prudent investors should consider looking elsewhere. The stock currently trades at a 4% discount to our quantitative fair value estimate of $39.24 per share; however, some caution is warranted due to this estimate's medium uncertainty rating.

The firm's profitability strengthens our estimated valuation. Highly profitable companies are often more resilient in recessions and are likely to generate stronger future cash flows for shareholders. Reflecting the firm's profitability is its assets turnover ratio of 0.7, which falls in the top 45% compared with global peers. This exemplifies its robust ability to scale the benefits it wrings out of a fixed set of assets and inventory. We believe this is a sign that shares could be cheap.

The company's solid growth is an additional encouraging factor. Consistent revenue and earnings growth indicates a company's potential for increased market share and profitability. The firm's EBIT 3-year growth of 41.5%, for example, falls in the top 20% compared with peers globally. Earnings before interest and taxes growth over the past three years has proved robust, bolstering the long-term value of the business. This characteristic further promotes our favorable price/fair value ratio.

In addition to the aforementioned drivers, our model considers momentum as part of its comprehensive analysis. This share class has outperformed the broader universe over the past year. While we believe the stock is undervalued, this outperformance had a negative impact on our valuation estimate.

With its quantitative economic moat rating of none, we do not expect this company to materially outearn its cost of capital in the long run. However, its financial health score is strong, suggesting that the company should be well positioned to weather tough times.