ASX:OEC

Stock Analysis Report

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Executive Summary

Orbital Corporation Limited engages in the design, manufacture, and sale of unmanned aerial vehicle (UAV) propulsion systems and flight critical components in Australia and the United States.


Snowflake Analysis

High growth potential with imperfect balance sheet.


Similar Companies

Share Price & News

How has Orbital's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: OEC's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

35.6%

OEC

19.2%

AU Aerospace & Defense

3.6%

AU Market


1 Year Return

180.6%

OEC

17.0%

AU Aerospace & Defense

-10.3%

AU Market

Return vs Industry: OEC exceeded the Australian Aerospace & Defense industry which returned 17% over the past year.

Return vs Market: OEC exceeded the Australian Market which returned -10.3% over the past year.


Shareholder returns

OECIndustryMarket
7 Day35.6%19.2%3.6%
30 Day18.8%2.3%0.2%
90 Day100.0%23.8%16.4%
1 Year180.6%180.6%18.8%17.0%-6.6%-10.3%
3 Year102.0%102.0%92.2%83.5%18.2%2.5%
5 Year87.0%87.0%164.2%140.0%35.7%6.4%

Price Volatility Vs. Market

How volatile is Orbital's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Orbital undervalued compared to its fair value and its price relative to the market?

5.72x

Price to Book (PB) ratio


Share Price vs. Fair Value

Below Fair Value: OEC (A$1.01) is trading above our estimate of fair value (A$0.78)

Significantly Below Fair Value: OEC is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: OEC is unprofitable, so we can't compare its PE Ratio to the Aerospace & Defense industry average.

PE vs Market: OEC is unprofitable, so we can't compare its PE Ratio to the Australian market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate OEC's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: OEC is overvalued based on its PB Ratio (5.7x) compared to the AU Aerospace & Defense industry average (3.3x).


Next Steps

Future Growth

How is Orbital forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

133.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: OEC is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (2.3%).

Earnings vs Market: OEC is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: OEC's is expected to become profitable in the next 3 years.

Revenue vs Market: OEC's revenue (31.1% per year) is forecast to grow faster than the Australian market (4.2% per year).

High Growth Revenue: OEC's revenue (31.1% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if OEC's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Orbital performed over the past 5 years?

-45.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: OEC is currently unprofitable.

Growing Profit Margin: OEC is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: OEC is unprofitable, and losses have increased over the past 5 years at a rate of -45.2% per year.

Accelerating Growth: Unable to compare OEC's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: OEC is unprofitable, making it difficult to compare its past year earnings growth to the Aerospace & Defense industry (11.2%).


Return on Equity

High ROE: OEC has a negative Return on Equity (-32.38%), as it is currently unprofitable.


Next Steps

Financial Health

How is Orbital's financial position?


Financial Position Analysis

Short Term Liabilities: OEC's short term assets (A$26.0M) exceed its short term liabilities (A$15.1M).

Long Term Liabilities: OEC's short term assets (A$26.0M) exceed its long term liabilities (A$9.2M).


Debt to Equity History and Analysis

Debt Level: OEC's debt to equity ratio (78.6%) is considered high.

Reducing Debt: OEC's debt to equity ratio has increased from 38.8% to 78.6% over the past 5 years.


Balance Sheet


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: OEC has less than a year of cash runway based on its current free cash flow.

Forecast Cash Runway: Insufficient data to determine if OEC has enough cash runway if its free cash flow continues to grow or shrink based on historical rates.


Next Steps

Dividend

What is Orbital current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

Notable Dividend: Unable to evaluate OEC's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate OEC's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if OEC's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if OEC's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of OEC's dividend in 3 years as they are not forecast to pay a notable one for the Australian market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.1yrs

Average board tenure


CEO

Todd Alder

2.92yrs

Tenure

AU$482,800

Compensation

Mr. Todd Mathew Alder, BEc (Acc), CPA ACIS has been the Chief Executive Officer and Managing Director at Orbital Corporation Limited since August 11, 2017. Mr. Alder served as the Chief Financial Officer a ...


CEO Compensation Analysis

Compensation vs Market: Todd's total compensation ($USD336.92K) is about average for companies of similar size in the Australian market ($USD262.14K).

Compensation vs Earnings: Todd's compensation has been consistent with company performance over the past year.


Board Members

NamePositionTenureCompensationOwnership
Todd Alder
MD, CEO & Executive Director2.92yrsAU$482.80k0.48% A$400.3k
Steven Gallagher
Independent Non-Executive Director3.25yrsAU$60.00k0.13% A$107.5k
John Welborn
Chairman of the Board5.33yrsAU$120.00k1.1% A$913.8k
F. Abbott
Independent Non-Executive Director2.17yrsAU$60.00k0.039% A$32.3k

3.1yrs

Average Tenure

Experienced Board: OEC's board of directors are considered experienced (3.1 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Orbital Corporation Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Orbital Corporation Limited
  • Ticker: OEC
  • Exchange: ASX
  • Founded: 1972
  • Industry: Aerospace and Defense
  • Sector: Capital Goods
  • Market Cap: AU$83.406m
  • Shares outstanding: 77.59m
  • Website: https://orbitaluav.com

Number of Employees


Location

  • Orbital Corporation Limited
  • 4 Whipple Street
  • Balcatta
  • Western Australia
  • 6021
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
OBTE.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1992
OREADB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992
OECASX (Australian Securities Exchange)YesOrdinary SharesAUAUDJan 1992
OECCHIA (Chi-X Australia)YesOrdinary SharesAUAUDJan 1992

Biography

Orbital Corporation Limited engages in the design, manufacture, and sale of unmanned aerial vehicle (UAV) propulsion systems and flight critical components in Australia and the United States. It also focuses on the manufacture, assembly, and delivery of engines and propulsion systems for unmanned aerial vehicles. The company was formerly known as Orbital Engine Corporation Limited and changed its name to Orbital Corporation Limited in October 2004. Orbital Corporation Limited was founded in 1972 and is headquartered in Balcatta, Australia. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/07/07 10:34
End of Day Share Price2020/07/07 00:00
Earnings2019/12/31
Annual Earnings2019/06/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.