ODP  Office Depot Inc.

Exchange

NYSE

Sector

Consumer Services

Industry

Other Specialty Stores

Market Cap.

2.29B

Vuru Grade

34.39/100

Current Price

$4.33
-0.06 (-1.37%)

Growth Price

$2.58
Overvalued by 40.40%

Stability Price

$29.20
Undervalued by 574.36%

Company Metrics

  • P/E 7.68
  • P/S 0.17
  • P/B 1.25
  • EPS 0.56
  • Cash ROIC 0.35%
  • Cash Ratio 0.39
  • Dividend 0.10 / 2.28 %
  • Avg. Vol. 6.22M
  • Shares 528.87M
  • Market Cap. 2.29B

Company Description

Office Depot, Inc., together with its subsidiaries, supplies office products and services. Its North American Retail division sells an assortment of merchandise, such as general office supplies, computer supplies, business machines and related supplies, and office furniture under various labels, including Office Depot, Viking Office Products, Foray, Ativa, Break Escapes, Niceday, and Worklife thro... more


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

News

Office Depot (ODP) to Report Q4 Earnings: What to Expect?
Yahoo Finance - Feb 24, 2017
Office Depot, Inc. ODP, the leading supplier of various office products and services, is slated to report fourth-quarter 2016 results, before the opening bell on Mar 1. The question lingering in investors' minds now is, whether the company will be able ...
You Down With ODP? Office Depot Likely To Report An In-Line Q4
Yahoo Finance - Feb 24, 2017
... NA Retail same-store sales and Business Solutions trends and retail profitability, coupled with significant progress on the recently resumed OfficeMax integration.
Office Depot, Inc. (NASDAQ:ODP) has current Market Capitalization of $2.28 Million - TopChronicle
Office Depot, Inc. (NASDAQ:ODP); Stocks Ride on Analysts Coverage- ZTO Express ... - Seneca Globe
Office Depot Inc. (ODP) Plunges 5.39% on February 23
Equities.com - Feb 23, 2017
Office Depot Inc. (ODP) had a rough trading day for Thursday February 23 as shares tumbled 5.39%, or a loss of $-0.25 per share, to close at $4.39.
Office Depot Taps Lenovo Executive Gerry Smith as CEO
Wall Street Journal - Jan 30, 2017
Office Depot Inc. on Monday announced Gerry Smith would succeed Roland Smith as chief executive of the office-supplies retailer less than a year after its failed tie-up with rival Staples Inc. Office Depot's plan to merge with Staples failed to pass ...
Office Depot, Inc. Appoints Gerry P. Smith as Chief Executive Officer - Yahoo Finance
Office Depot Inc (ODP) Announces New CEO - Investorplace.com
Office Depot Inc Risk Points versus Consumer Staples
CML News - Feb 23, 2017
This is a scatter plot analysis of the critical risk points from the option market for Office Depot Inc (NASDAQ:ODP) compared to its own past and the Consumer Staples ETF.
OFFICE DEPOT, INC. (NASDAQ:ODP) Files An 8-K Regulation FD Disclosure
Market Exclusive - Feb 15, 2017
Office Depot, Inc. (Office Depot) is a provider of office products and services. The Company sells products and services to consumers through three segments: North American Retail Division, North American Business Solutions Division and International ...
Office Depot Declares Quarterly Cash Dividend of $0.025 Per Share - Yahoo Finance
Taking a Look at the Data Behind Office Depot, Inc. (ODP) - StockNewsJournal
Jury awards Long Beach warehouse manager $10 million verdict against Office Depot
Long Beach Press Telegram - Feb 8, 2017
A former Office Depot Inc. employee who managed a warehouse in Long Beach won a $10 million verdict when jurors decided the company retaliated against him after he refused to fire two older workers and took leave time to recover from surgery.
Digging Up the Facts on Office Depot, Inc. (ODP)
StockNewsJournal - Feb 23, 2017
Office Depot, Inc. (ODP) is an interesting player in the Services space, with a focus on Specialty Retail, Other. The stock has been active on the tape, currently trading at $4.64, down from yesterday's close by -0.85%.
Office Depot, Inc. (ODP) : Checking the Chart
The USA Commerce - Feb 24, 2017
We have gathered the technical data on Office Depot, Inc. (ODP), and see some interesting trends in the stock's behavior of late.
Forward Earnings Estimate of Office Depot, Inc.(ODP)
Highland Mirror - Feb 23, 2017
Office Depot, Inc.(ODP): For the most recent quarter end, Office Depot, Inc. reported Annual Earnings of $0.16.
Investor's Watch List: Office Depot, Inc. (NASDAQ:ODP) - TopChronicle
Is It Time to go for Office Depot, Inc. (ODP), Zynga Inc. (ZNGA)? - StockNewsJournal
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for ODP 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 ODP'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.

$4.33 Current Price

$2.58 Growth Price (DCF)

Overvalued by 40.40%


Growth Rate Assumed by Market: 500.00%


Future Free Cash Flow Growth Rate: 0.0%


Discount Rate: 15.0%


ODP's most recent year of (normalized) free cash flow is negative. This is the base number for forward projections. This means that if you increase the growth rate, the amount of negative FCF grows, thereby decreasing the price.

Show Free Cash Flow numbers

$29.20 Stability Price (EPV)

Undervalued by 574.36%


Discount Rate: 15.0%

$5.08 Book Price

Undervalued by 17.28%


Poor Cash Return on Invested Capital over the past 5 years

ODP has been unable to consistently generate sufficient returns from its investments in buildings, projects and equipment. This could be due to poor management, lack of an economic moat or the capital intensive nature of the business.

ODP has only created $0.35 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20112012201320142015
Free Cash Flow 69.35M 59.07M -244.00M 33.00M -37.00M
divided by
Invested Capital 1.63B 1.29B 3.60B 2.88B 2.63B
Cash ROIC 4.25% 4.57% -6.78% 1.15% -1.41%

Very Poor Return on Equity over the past 5 years

ODP has shown an inability to deliver results for shareholders. This could be due to poor management, ODP operating in a highly competitive industry, or having a weak business in general.

ODP has generated a $4.18 loss for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20112012201320142015
Net Income 95.69M -77.12M -20.00M -352.00M 8.00M
divided by
Stockholders' Equity 739.07M 661.44M 2.06B 1.62B 1.60B
Return on Equity 12.95% -11.66% -0.97% -21.71% 0.50%

Good Business Performance over the past 10 years

It's likely ODP has been unable to maintain profitability in tough economic times, making it a somewhat cyclical business. The other possibility is ODP has expended significant capital on items such as property, plant and equipment in specific years. Look for correlations.

ODP has created positive free cash flow for 7 or 8 of the past 10 years.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Free Cash Flow 483.66M -49.19M 138.18M 165.59M 30.26M 69.35M 59.07M -244.00M 33.00M -37.00M

Weak Balance Sheet

ODP's financial position is not ideal. The key is to check whether ODP 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 173.55M 222.95M 155.75M 659.90M 627.48M 570.68M 670.81M 955.00M 1.07B 1.07B
Current Assets 3.46B 3.72B 3.12B 3.21B 3.09B 2.74B 2.70B 4.40B 4.22B 4.06B
Total Assets 6.57B 7.26B 5.27B 4.89B 4.65B 4.25B 4.01B 7.48B 6.84B 6.44B
Current Liabilities 2.97B 2.97B 2.63B 2.43B 2.34B 2.05B 2.05B 2.92B 2.89B 2.74B
Total Liabilities 3.96B 4.17B 3.91B 4.10B 3.87B 3.51B 3.35B 5.41B 5.22B 4.84B
Stockholder' Equity 2.61B 3.08B 1.36B 786.42M 778.43M 739.07M 661.44M 2.06B 1.62B 1.60B
Current Ratio 1.16 1.25 1.19 1.32 1.32 1.34 1.32 1.50 1.46 1.48
TL-to-TA 0.60 0.58 0.74 0.84 0.83 0.83 0.84 0.72 0.76 0.75

Low or No Reinvestment of Profits over the past 10 years

ODP has either been retaining a small amount of their earnings or has done so inconsistently. A lack of consistency could be due to ODP operating at a loss or them having such a strong economic moat they feel comfortable spending profits on growth. Be wary of future prospects and if applicable, inspect the moat's sustainability.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Retained Earnings 3.38B 3.78B 6.27M -590.20M -555.30M -539.12M -616.24M -636.00M -990.00M -982.00M
Retained Earnings Growth - 11.84% -99.83% -9,513.00% 5.91% 2.91% -14.30% -3.21% -55.66% 0.81%

Loss Making Entity over the past 10 years

ODP has been unable to maintain profitability. It's Costs of Sales have outstripped Revenue consistently. This is a huge red flag, unless the company has been investing heavily for the future. However, even that is dubious since accurately predicting the future of a company like that is extremely difficult.

$1.10 of every $100 of Revenue have been a loss, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Net Income 516.14M 395.62M -1.48B -596.47M 34.89M 95.69M -77.12M -20.00M -352.00M 8.00M
divided by
Revenue 15.01B 15.53B 14.50B 12.14B 11.63B 11.49B 10.70B 11.24B 16.10B 14.49B
Net Profit Margin 3.44% 2.55% -10.20% -4.91% 0.30% 0.83% -0.72% -0.18% -2.19% 0.06%

Inconsistent Gross Profit Margins over the past 10 years

ODP has good gross profit margins, however inconsistency of these margins is a cause for concern. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

$34.59 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 4.67B 4.50B 4.01B 3.39B 3.36B 11.49B 3.25B 2.63B 3.78B 3.50B
divided by
Revenue 15.01B 15.53B 14.50B 12.14B 11.63B 11.49B 10.70B 11.24B 16.10B 14.49B
Gross Margin 31.10% 29.00% 27.63% 27.93% 28.86% 100.00% 30.36% 23.36% 23.46% 24.18%

High Capital Intensity over the past 10 years

ODP 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.

568.46% 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 343.42M 460.57M 330.08M 130.85M 169.45M 130.32M 120.26M 137.00M 123.00M 163.00M
divided by
Net Income 516.14M 395.62M -1.48B -596.47M 34.89M 95.69M -77.12M -20.00M -352.00M 8.00M
Capital Expenditure Ratio 66.54% 116.42% -22.32% -21.94% 485.65% 136.18% -155.94% -685.00% -34.94% 2,037.50%

No Dividend History over the past 10 years

ODP 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 288.34M 276.65M 273.07M 313.08M 354.53M 356.80M 362.56M 381.00M 535.00M 555.00M
Dividend Paid Per Share - - - - - - - - - -
Price at Year End 38.17 13.65 2.84 6.55 5.53 2.15 3.27 5.23 8.61 5.55
Dividend Yield - - - - - - - - - -

History of Stock Buybacks over the past 10 years

ODP has some 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 288.34M 276.65M 273.07M 313.08M 354.53M 356.80M 362.56M 381.00M 535.00M 555.00M
Stock Bought Back - 4.23% 1.31% -12.78% -11.69% -0.63% -1.59% -4.84% -28.79% -3.60%
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