ODP  Office Depot Inc.

Exchange

NYSE

Sector

Consumer Services

Industry

Other Specialty Stores

Market Cap.

1.62B

Vuru Grade

33.01/100

Current Price

$3.13
+0.025 (+0.806%)

Growth Price

$8.30
Undervalued by 165.68%

Stability Price

$5.56
Undervalued by 77.78%

Company Metrics

  • P/E 4.048
  • P/S 0.152
  • P/B 0.814
  • EPS 0.772
  • Cash ROIC 2.28%
  • Cash Ratio 0.38
  • Dividend 0.1 / 2.69%
  • Avg. Vol. 5.96M
  • Shares 518.40M
  • Market Cap. 1.62B

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, Inc. (ODP) Ex-Dividend Date Scheduled for November 22, 2017
Nasdaq - 20 hours ago
Office Depot, Inc. ( ODP ) will begin trading ex-dividend on November 22, 2017. A cash dividend payment of $0.025 per share is scheduled to be paid on December 15, 2017.
Dissecting the Numbers for Office Depot, Inc. (ODP) and Five Below, Inc. (FIVE) - StockNewsGazette
Zacks: Analysts Expect Office Depot, Inc. (ODP) to Announce $0.08 Earnings Per ... - The Ledger Gazette
Office Depot: Surprisingly Good Results
Seeking Alpha - Nov 14, 2017
Results from Office Depot (ODP) were surprisingly better than the cynic in me had been expecting. Namely, Office Depot generated significantly more free cash flow than I originally projected. Office Depot highlighted at the beginning of October 2017 ...
Which Way Traders Signposts Nielsen Holdings plc (NLSN), Office Depot, Inc ... - StockNewsJournal
What The Technical Indicators Are Saying About Office Depot, Inc. (ODP), The ... - Post Analyst
Here's Why Office Depot, Inc. Shares Dropped 32% in October
Motley Fool - Nov 9, 2017
The retailer released plans to pivot the company "from a traditional office products retailer to a broader business services and technology products platform.
Office Depot, Inc. Announces Completion of CompuCom Acquisition and ... - Business Wire (press release)
Why Office Depot Inc Stock Tumbled Today
Motley Fool - Oct 30, 2017
Shares of Office Depot Inc (NASDAQ:ODP) were tumbling today after the struggling office supply retailer was downgraded by J.P.
LPC: Office Depot considers sweeteners to M&A loan - Reuters
Office Depot Inc. (ODP) Moves Higher on Volume Spike for October 31 - Equities.com
Office Depot Inc. Q3 Profit Falls 17%
Nasdaq - Nov 9, 2017
(RTTNews.com) - Office Depot Inc. ( ODP ) released earnings for third quarter that retreated from last year. The company said its profit declined to $74 million, or $0.14 per share.
Office Depot Offers Early Black Friday Deals in Stores and at officedepot.com ...
Business Wire (press release) - Oct 26, 2017
BOCA RATON, Fla.--(BUSINESS WIRE)--Office Depot, Inc. (NASDAQ:ODP), a leading provider of office supplies, business products and services delivered through an omnichannel platform, today announced, it is giving customers a jump start on the holiday ...
How Have Institutional Investors Been Trading Office Depot, Inc. (ODP)? - Economic News
eBay Inc. (EBAY) vs. Office Depot, Inc. (ODP): Which is the Better Investment? - StockNewsGazette
Office Depot Inc Earnings: 14 Things to Know About Q3
Yahoo Finance - Nov 9, 2017
Analysts were expecting Office Depot Inc to report revenue of $2.61 billion for the quarter. Retail sales for the quarter were $1.33 billion, which is down from $1.48 billion a year ago.
Ex-Dividend Reminder: Carnival, Office Depot and National Grid
Forbes - Nov 20, 2017
Looking at the universe of stocks we cover at Dividend Channel, on 11/22/17, Carnival Corp (NYSE: CCL), Office Depot, Inc. (NASD: ODP), and National Grid plc (NYSE: NGG) will all trade ex-dividend for their respective upcoming dividends. Carnival Corp ...
Office Depot meets 3Q profit forecasts
Seattle Times - Nov 9, 2017
(AP) - Office Depot Inc. (ODP) on Thursday reported third-quarter net income of $92 million. On a per-share basis, the Boca Raton, Florida-based company said it had profit of 17 cents.
Office Depot (ODP) Q3 Earnings Likely to Decline: Here's Why
Nasdaq - Nov 6, 2017
Office Depot, Inc. ODP , which is slated to release third-quarter 2017 results on Nov 9, has seen shares plunge 47.6% in the past three months.
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.

$3.13 Current Price

$8.30 Growth Price (DCF)

Undervalued by 165.68%


Growth Rate Assumed by Market: -500.00%


Future Free Cash Flow Growth Rate: 0.0%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$5.56 Stability Price (EPV)

Undervalued by 77.78%


Discount Rate: 15.0%

$5.40 Book Price

Undervalued by 72.73%


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 $2.28 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20122013201420152016
Free Cash Flow 59.07M -244.00M 33.00M -37.00M 381.00M
divided by
Invested Capital 1.29B 3.60B 2.88B 2.63B 2.75B
Cash ROIC 4.57% -6.78% 1.15% -1.41% 13.87%

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 $1.06 loss for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20122013201420152016
Net Income -77.12M -20.00M -352.00M 8.00M 529.00M
divided by
Stockholders' Equity 661.44M 2.06B 1.62B 1.60B 1.85B
Return on Equity -11.66% -0.97% -21.71% 0.50% 28.56%

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
2007200820092010201120122013201420152016
Free Cash Flow -49.19M 138.18M 165.59M 30.26M 69.35M 59.07M -244.00M 33.00M -37.00M 381.00M

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
2007200820092010201120122013201420152016
Cash 222.95M 155.75M 659.90M 627.48M 570.68M 670.81M 955.00M 1.07B 1.07B 763.00M
Current Assets 3.72B 3.12B 3.21B 3.09B 2.74B 2.70B 4.40B 4.22B 4.06B 2.97B
Total Assets 7.26B 5.27B 4.89B 4.65B 4.25B 4.01B 7.48B 6.84B 6.44B 5.54B
Current Liabilities 2.97B 2.63B 2.43B 2.34B 2.05B 2.05B 2.92B 2.89B 2.74B 2.03B
Total Liabilities 4.17B 3.91B 4.10B 3.87B 3.51B 3.35B 5.41B 5.22B 4.84B 3.69B
Stockholder' Equity 3.08B 1.36B 786.42M 778.43M 739.07M 661.44M 2.06B 1.62B 1.60B 1.85B
Current Ratio 1.25 1.19 1.32 1.32 1.34 1.32 1.50 1.46 1.48 1.46
TL-to-TA 0.58 0.74 0.84 0.83 0.83 0.84 0.72 0.76 0.75 0.67

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
2007200820092010201120122013201420152016
Retained Earnings 3.78B 6.27M -590.20M -555.30M -539.12M -616.24M -636.00M -990.00M -982.00M -453.00M
Retained Earnings Growth - -99.83% -9,513.00% 5.91% 2.91% -14.30% -3.21% -55.66% 0.81% 53.87%

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.

$0.97 of every $100 of Revenue have been a loss, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Net Income 395.62M -1.48B -596.47M 34.89M 95.69M -77.12M -20.00M -352.00M 8.00M 529.00M
divided by
Revenue 15.53B 14.50B 12.14B 11.63B 11.49B 10.70B 11.24B 16.10B 14.49B 11.02B
Net Profit Margin 2.55% -10.20% -4.91% 0.30% 0.83% -0.72% -0.18% -2.19% 0.06% 4.80%

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.

$33.94 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
2007200820092010201120122013201420152016
Gross Profit 4.50B 4.01B 3.39B 3.36B 11.49B 3.25B 2.63B 3.78B 3.50B 2.71B
divided by
Revenue 15.53B 14.50B 12.14B 11.63B 11.49B 10.70B 11.24B 16.10B 14.49B 11.02B
Gross Margin 29.00% 27.63% 27.93% 28.86% 100.00% 30.36% 23.36% 23.46% 24.18% 24.57%

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.

559.35% 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
2007200820092010201120122013201420152016
Capital Expenditure 460.57M 330.08M 130.85M 169.45M 130.32M 120.26M 137.00M 123.00M 163.00M 111.00M
divided by
Net Income 395.62M -1.48B -596.47M 34.89M 95.69M -77.12M -20.00M -352.00M 8.00M 529.00M
Capital Expenditure Ratio 116.42% -22.32% -21.94% 485.65% 136.18% -155.94% -685.00% -34.94% 2,037.50% 20.98%

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
2007200820092010201120122013201420152016
Dividend Paid - - - - - - - - - -
divided by
Shares Outstanding 276.65M 273.07M 313.08M 354.53M 356.80M 362.56M 381.00M 535.00M 555.00M 549.00M
Dividend Paid Per Share - - - - - - - - - -
Price at Year End 13.65 2.84 6.55 5.53 2.15 3.27 5.23 8.61 5.55 4.52
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
2007200820092010201120122013201420152016
Shares Outstanding 276.65M 273.07M 313.08M 354.53M 356.80M 362.56M 381.00M 535.00M 555.00M 549.00M
Stock Bought Back - 1.31% -12.78% -11.69% -0.63% -1.59% -4.84% -28.79% -3.60% 1.09%
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