NSR  Neustar Inc.

Exchange

NYSE

Sector

Consumer Services

Industry

Telecommunications Equipment

Market Cap.

1.82B

Vuru Grade

81.85/100

Current Price

$33.25
-0.15 (-0.45%)

Growth Price

$74.96
Undervalued by 125.46%

Stability Price

$26.18
Overvalued by 21.26%

Company Metrics

  • P/E 10.94
  • P/S 1.51
  • P/B 1.98
  • EPS 3.04
  • Cash ROIC 20.47%
  • Cash Ratio 0.22
  • Dividend 0 / 0%
  • Avg. Vol. 1.19M
  • Shares 54.74M
  • Market Cap. 1.82B

Company Description

NeuStar, Inc. provides technology and directory services to its communications service provider (carrier) and non-carrier, commercial business customers. The company also offers technology services upon which its carrier and enterprise customers rely to manage a range of technical and operating requirements. It serves traditional providers of communications, including local exchange carriers, comp... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

NeuStar Inc. (NSR) Stake Raised by the Sei Investments Co.
Petro Global News 24 - Jan 5, 2017
Sei Investments Co. boosted its position in shares of NeuStar Inc. (NYSE:NSR) by 2.5% during the third quarter, according to its most recent Form 13F filing with the Securities and Exchange Commission (SEC).
Why Shares of NeuStar Inc. Surged Today
Motley Fool - Dec 14, 2016
Shares of information services provider NeuStar Inc. (NYSE:NSR) jumped on Wednesday after the company agreed to be acquired by a private investment group.
Private equity group to purchase NeuStar for $2.9 billion - Washington Business Journal
Neustar Inc (NYSE:NSR) Privatization Triggers Probes - Market Exclusive
Neustar Inc. Appoints Barret Lyon as Research and Development Head
MarTech Advisor - Jan 30, 2017
Neustar, a platform which provides information services in real-time, has announced that it has hired Barrett Lyon as its new Research and Development Head for Neustar Security Solutions. He will be spearheading product innovation. Lyon will be heading ...
Stock market upbeat on NeuStar's split into two companies
Washington Business Journal (blog) - Jun 21, 2016
The stock market reacted favorably to news Tuesday that Sterling-based NeuStar Inc. will essentially split into two publicly traded companies.
Neustar Inc. announces plan to split into two companies - UPI.com
Neustar Announces Intention to Separate into Two Independent Publicly Traded ... - Business Wire (press release)
NeuStar sees big opportunity in massive cyber attacks
Washington Business Journal - Oct 31, 2016
Sterling-based NeuStar Inc. (NYSE: NSR) sees the massive cyberattacks roiling the internet in the last few months as a vital opportunity.
NeuStar gets key contract with Canadian telecom industry
Washington Business Journal - Aug 3, 2016
Sterling-based NeuStar Inc. will continue to serve as the local number portability administrator for the Canadian LNP Consortium Inc., as the two parties agreed to a deal Tuesday.
NeuStar, Inc. (NYSE:NSR) Files An 8-K Entry into a Material Definitive Agreement
Market Exclusive - Dec 14, 2016
Neustar, Inc. is a real-time provider of cloud-based information services, enabling marketing and information technology (IT) security professionals to promote and protect their businesses.
SHAREHOLDER ALERT: Rigrodsky & Long, PA Files Class Action Suit Against ...
Yahoo Finance - Feb 9, 2017
Rigrodsky & Long, P.A. announces that it has filed a class action complaint in the United States District Court for the District of Delaware on behalf of holders of Neustar, Inc. (“Neustar”) (NSR) common stock in connection with the proposed ...
Neustar Slams Telcordia's Ericsson Ties In FCC Contract Row
Law360 (subscription) - Sep 13, 2016
Law360, Washington (September 13, 2016, 2:45 PM EDT) -- Neustar Inc. made its long-awaited plea Tuesday to scrap the Federal Communications Commission's clearance of Telcordia Technologies Inc. for a $460 million phone-number routing contract ...
NeuStar, Inc. Shareholder Alert: Former SEC Attorney Willie Briscoe and Powers ...
Yahoo Finance - Dec 27, 2016
Former United States Securities and Exchange Commission attorney Willie Briscoe and the securities litigation firm of Powers Taylor LLP are investigating potential claims against the Board of Directors of NeuStar, Inc. (“NeuStar”) (NSR) concerning the ...
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for NSR to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate NSR's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$33.25 Current Price

$74.96 Growth Price (DCF)

Undervalued by 125.46%


Growth Rate Assumed by Market: -17.33%


Future Free Cash Flow Growth Rate: 12.1%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$26.18 Stability Price (EPV)

Overvalued by 21.26%


Discount Rate: 15.0%

$51.75 Book Price

Undervalued by 55.65%


Excellent Cash Return on Invested Capital over the past 5 years

NSR has efficiently invested its financial resources in buildings, projects, and equipment, resulting in strong returns. Annual Reports can be useful in identifying the cause of one-time events and future sustainability.

NSR has created $20.47 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20112012201320142015
Free Cash Flow 180.63M 250.47M 234.62M 259.50M 323.20M
divided by
Invested Capital 1.10B 1.03B 1.11B 1.20B 1.71B
Cash ROIC 16.35% 24.43% 21.09% 21.61% 18.88%

Excellent Return on Equity over the past 5 years

Over the past 5 years, NSR has generated strong profits with money shareholders have invested. This is considered one of the best indicators of quality management. Beware of extremely high Return on Equity (> 50%) as this is often unsustainable.

NSR has generated $25.41 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20112012201320142015
Net Income 123.57M 156.09M 162.75M 163.69M 175.46M
divided by
Stockholders' Equity 502.63M 646.61M 589.57M 618.91M 723.50M
Return on Equity 24.59% 24.14% 27.61% 26.45% 24.25%

Excellent Business Performance over the past 10 years

NSR has been able to maintain profitability in good times and bad. This could mean NSR has an extremely strong business or has the ability to scale down costs when needed. This should be a fairly resilient business, but double check for future sustainability by looking at its Risk Factors in the Annual Report.

NSR has created positive free cash flow for 9 or more of the past 10 years.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Free Cash Flow 103.72M 118.63M 141.85M 149.85M 106.70M 180.63M 250.47M 234.62M 259.50M 323.20M

Weak Balance Sheet

NSR's financial position is not ideal. The key is to check whether NSR is using debt to fuel its growth and the sustainability of that tendency. Highly capital intensive businesses (see Economic Moat) follow this route, which can deeply impact the future prospects of the business.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Cash 58.25M 198.68M 161.65M 342.19M 345.37M 132.78M 343.92M 223.31M 326.58M 89.10M
Current Assets 135.68M 310.14M 268.69M 434.77M 460.73M 339.40M 525.76M 436.14M 554.97M 319.54M
Total Assets 448.26M 616.66M 519.17M 647.80M 733.87M 1.38B 1.53B 1.51B 1.74B 2.20B
Current Liabilities 81.71M 99.27M 104.05M 118.51M 115.50M 145.40M 157.43M 171.30M 211.92M 400.97M
Total Liabilities 107.11M 136.13M 132.51M 143.37M 137.76M 880.00M 880.12M 917.51M 1.12B 1.48B
Stockholder' Equity 341.15M 480.54M 386.65M 504.44M 596.11M 502.63M 646.61M 589.57M 618.91M 723.50M
Current Ratio 1.66 3.12 2.58 3.67 3.99 2.33 3.34 2.55 2.62 0.80
TL-to-TA 0.24 0.22 0.26 0.22 0.19 0.64 0.58 0.61 0.64 0.67

Consistent Reinvestment of Profits over the past 10 years

NSR has consistently retained profits. This may put NSR in a strong position to invest for the future, by buying new machinery, investing in R&D or a number of other options. By effectively using these earnings, NSR can greatly improve their long-term economic picture.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Retained Earnings 97.70M 190.03M 194.33M 295.47M 401.68M 562.50M 718.59M 881.34M 845.18M 916.49M
Retained Earnings Growth - 94.51% 2.26% 52.05% 35.95% 40.04% 27.75% 22.65% -4.10% 8.44%

Inconsistent Net Profit Margins over the past 10 years

NSR potentially has a competitive advantage, however inconsistent profit margins are a cause for concern. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

$17.62 of every $100 of Revenue have been pure profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Net Income 73.90M 92.34M 4.29M 101.14M 106.21M 123.57M 156.09M 162.75M 163.69M 175.46M
divided by
Revenue 332.96M 429.17M 488.85M 480.39M 526.81M 620.46M 831.39M 902.04M 963.59M 1.05B
Net Profit Margin 22.19% 21.51% 0.88% 21.05% 20.16% 19.92% 18.77% 18.04% 16.99% 16.71%

Strong Pricing Power over the past 10 years

NSR has maintained substantial gross margins, suggesting that they have been able to set prices without consideration of the cost of goods sold. This potentially leaves flexibility in inflationary environments to raise prices on consumers and maintain profitability.

$78.21 of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Gross Profit 246.85M 334.22M 383.26M 367.13M 405.10M 602.95M 645.42M 689.47M 716.47M 763.72M
divided by
Revenue 332.96M 429.17M 488.85M 480.39M 526.81M 620.46M 831.39M 902.04M 963.59M 1.05B
Gross Margin 74.14% 77.88% 78.40% 76.42% 76.90% 97.18% 77.63% 76.43% 74.35% 72.74%

High Capital Intensity over the past 10 years

NSR spends large amounts of capital buying new equipment or investing in new facilities to stay competitive. Over the long term, those costs may have to be fuelled by debt. Look at the growth of Shareholders' Equity to see if this strategy is having a positive or negative impact.

86.83% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Capital Expenditure 13.66M 27.24M 25.78M 25.50M 38.08M 45.79M 53.09M 53.24M 60.16M 32.14M
divided by
Net Income 73.90M 92.34M 4.29M 101.14M 106.21M 123.57M 156.09M 162.75M 163.69M 175.46M
Capital Expenditure Ratio 18.48% 29.51% 600.37% 25.21% 35.85% 37.05% 34.02% 32.71% 36.75% 18.32%

No Dividend History over the past 10 years

NSR has never distributed dividends or has recently suspended their dividend distribution.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Dividend Paid - - - - - - - - - -
divided by
Shares Outstanding 78.27M 79.24M 75.90M 75.47M 76.07M 74.50M 67.96M 66.11M 59.54M 55.90M
Dividend Paid Per Share - - - - - - - - - -
Price at Year End 32.44 28.48 18.80 23.37 26.23 34.17 41.54 49.95 27.76 25.00
Dividend Yield - - - - - - - - - -

Strong History of Stock Buybacks over the past 10 years

NSR has a strong history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Shares Outstanding 78.27M 79.24M 75.90M 75.47M 76.07M 74.50M 67.96M 66.11M 59.54M 55.90M
Stock Bought Back - -1.22% 4.39% 0.58% -0.79% 2.11% 9.62% 2.80% 11.04% 6.50%
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