We Think You Can Look Beyond Ubiquiti's (NYSE:UI) Lackluster Earnings

Simply Wall St.11-16

The market was pleased with the recent earnings report from Ubiquiti Inc. (NYSE:UI), despite the profit numbers being soft. Our analysis suggests that investors may have noticed some promising signs ...

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(NYSE:UI), despite the profit numbers being soft. Our analysis suggests that investors may have noticed some promising signs ...</p>\n\n<a href=\"https://finance.yahoo.com/news/think-look-beyond-ubiquitis-nyse-122941364.html\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"UI","symbol_name":"厄比奎蒂","start_time":0,"source_url":"https://finance.yahoo.com/news/think-look-beyond-ubiquitis-nyse-122941364.html","article_id":"2483768513","we_media_id":null,"thumbnails":["https://s.yimg.com/uu/api/res/1.2/d4E4P3C1gbs8FgjLBwQDxQ--~B/aD00MzI7dz0xMTk0O2FwcGlkPXl0YWNoeW9u/https://media.zenfs.com/en/simply_wall_st__316/de3693c96ca28c16427680d76341d044"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2483768513","pubTimestamp":1731760181,"sourceInfo":{"source_id":"yahoofinance","name":"雅虎金融"},"weMediaInfo":null,"summary":"The market was pleased with the recent earnings report from Ubiquiti Inc. , despite the profit numbers being soft. Our analysis suggests that investors may have noticed some promising signs beyond the statutory profit figures.Therefore, it's actually considered a good thing when a company has a negative accrual ratio, but a bad thing if its accrual ratio is positive. That is not intended to imply we should worry about a positive accrual ratio, but it's worth noting where the accrual ratio is rather high. To quote a 2014 paper by Lewellen and Resutek, \"firms with higher accruals tend to be less profitable in the future\".Today we've zoomed in on a single data point to better understand the nature of Ubiquiti's profit. But there is always more to discover if you are capable of focussing your mind on minutiae. Some people consider a high return on equity to be a good sign of a quality business. While it might take a little research on your behalf, you may find this free  collection of comp","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":["earning"],"viewcount":null,"language":"en","relate_stocks":{"UI":"厄比奎蒂","NYSE":"纽交所"},"translate_title":"我们认为您可以超越Ubiquiti(NYSE：UI)低迷的盈利","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"NYSE":1,"UI":1},"content_text":"The market was pleased with the recent earnings report from Ubiquiti Inc. (NYSE:UI), despite the profit numbers being soft. Our analysis suggests that investors may have noticed some promising signs beyond the statutory profit figures. \n See our latest analysis for Ubiquiti \n\n\n\n  NYSE:UI Earnings and Revenue History November 16th 2024\n \n\n Zooming In On Ubiquiti's Earnings \n In high finance, the key ratio used to measure how well a company converts reported profits into free cash flow (FCF) is the accrual ratio (from cashflow). In plain english, this ratio subtracts FCF from net profit, and divides that number by the company's average operating assets over that period. You could think of the accrual ratio from cashflow as the 'non-FCF profit ratio'. \n Therefore, it's actually considered a good thing when a company has a negative accrual ratio, but a bad thing if its accrual ratio is positive. That is not intended to imply we should worry about a positive accrual ratio, but it's worth noting where the accrual ratio is rather high. To quote a 2014 paper by Lewellen and Resutek, \"firms with higher accruals tend to be less profitable in the future\". \n For the year to September 2024, Ubiquiti had an accrual ratio of -0.42. That indicates that its free cash flow quite significantly exceeded its statutory profit. Indeed, in the last twelve months it reported free cash flow of US$696m, well over the US$390.2m it reported in profit. Given that Ubiquiti had negative free cash flow in the prior corresponding period, the trailing twelve month resul of US$696m would seem to be a step in the right direction. \n That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates. \nOur Take On Ubiquiti's Profit Performance\n Happily for shareholders, Ubiquiti produced plenty of free cash flow to back up its statutory profit numbers. Based on this observation, we consider it possible that Ubiquiti's statutory profit actually understates its earnings potential! Unfortunately, though, its earnings per share actually fell back over the last year. Of course, we've only just scratched the surface when it comes to analysing its earnings; one could also consider margins, forecast growth, and return on investment, among other factors. Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. In terms of investment risks, we've identified 1 warning sign with Ubiquiti, and understanding it should be part of your investment process. \n Today we've zoomed in on a single data point to better understand the nature of Ubiquiti's profit. But there is always more to discover if you are capable of focussing your mind on minutiae. Some people consider a high return on equity to be a good sign of a quality business. While it might take a little research on your behalf, you may find this free  collection of companies boasting high return on equity, or  this list of stocks with significant insider holdings to be useful. \nHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"-1","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2483768513"}