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SSM

Service StreamASX:SSM Stock Report

Market Cap

AU$455.2m

7D

8.9%

1Y

-58.0%

Updated

28 Sep, 2021

Data

Company Financials +
SSM fundamental analysis
Snowflake Score
Valuation5/6
Future Growth4/6
Past Performance2/6
Financial Health5/6
Dividends0/6

SSM Overview

Service Stream Limited engages in the access, design, build, installation, and maintenance of networks in Australia.

Service Stream Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Service Stream
Historical stock prices
Current Share PriceAU$0.86
52 Week HighAU$0.73
52 Week LowAU$2.47
Beta0.62
1 Month Change-0.58%
3 Month Change-1.15%
1 Year Change-58.05%
3 Year Change-52.09%
5 Year Change-27.43%
Change since IPO-28.44%

Recent News & Updates

May 12
Service Stream Limited (ASX:SSM) Shares Could Be 49% Below Their Intrinsic Value Estimate

Service Stream Limited (ASX:SSM) Shares Could Be 49% Below Their Intrinsic Value Estimate

Today we'll do a simple run through of a valuation method used to estimate the attractiveness of Service Stream Limited...

Shareholder Returns

SSMAU ConstructionAU Market
7D8.9%3.1%1.5%
1Y-58.0%2.0%24.8%

Return vs Industry: SSM underperformed the Australian Construction industry which returned 2% over the past year.

Return vs Market: SSM underperformed the Australian Market which returned 24.8% over the past year.

Price Volatility

Is SSM's price volatile compared to industry and market?
SSM volatility
SSM Beta0.62
Industry Beta0.97
Market Beta1

Stable Share Price: SSM is less volatile than 75% of Australian stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: SSM's weekly volatility (5%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
1996n/aLeigh MacKenderhttps://www.servicestream.com.au

Service Stream Limited engages in the access, design, build, installation, and maintenance of networks in Australia. It operates in two segments, Telecommunications and Utilities. The Telecommunications segment provides various operations, maintenance, installation, design, and construction services to owners of fixed-line and wireless telecommunication, including customer connections; service and network assurance; site acquisition; and design, construction, and installation of broadband, wireless, and fixed-line project services, as well as projects for asset remediation, augmentation, and relocation.

Service Stream Fundamentals Summary

How do Service Stream's earnings and revenue compare to its market cap?
SSM fundamental statistics
Market CapAU$455.24m
Earnings (TTM)AU$29.27m
Revenue (TTM)AU$803.01m

16.3x

P/E Ratio

0.6x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
SSM income statement (TTM)
RevenueAU$803.01m
Cost of RevenueAU$460.78m
Gross ProfitAU$342.22m
ExpensesAU$312.95m
EarningsAU$29.27m

Last Reported Earnings

Jun 30, 2021

Next Earnings Date

n/a

Earnings per share (EPS)0.053
Gross Margin42.62%
Net Profit Margin3.65%
Debt/Equity Ratio10.4%

How did SSM perform over the long term?

See historical performance and comparison

Valuation

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

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: SSM (A$0.86) is trading below our estimate of fair value (A$3.54)

Significantly Below Fair Value: SSM is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: SSM is poor value based on its PE Ratio (16.3x) compared to the Australian Construction industry average (14.8x).

PE vs Market: SSM is good value based on its PE Ratio (16.3x) compared to the Australian market (19x).


Price to Earnings Growth Ratio

PEG Ratio: SSM is good value based on its PEG Ratio (0.8x)


Price to Book Ratio

PB vs Industry: SSM is good value based on its PB Ratio (1.5x) compared to the AU Construction industry average (2x).


Future Growth

How is Service Stream forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

19.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SSM's forecast earnings growth (19.3% per year) is above the savings rate (1.9%).

Earnings vs Market: SSM's earnings (19.3% per year) are forecast to grow faster than the Australian market (11.4% per year).

High Growth Earnings: SSM's earnings are forecast to grow, but not significantly.

Revenue vs Market: SSM's revenue (25.3% per year) is forecast to grow faster than the Australian market (5.2% per year).

High Growth Revenue: SSM's revenue (25.3% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SSM's Return on Equity is forecast to be low in 3 years time (10.8%).


Past Performance

How has Service Stream performed over the past 5 years?

10.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SSM has high quality earnings.

Growing Profit Margin: SSM's current net profit margins (3.6%) are lower than last year (5.3%).


Past Earnings Growth Analysis

Earnings Trend: SSM's earnings have grown by 10.7% per year over the past 5 years.

Accelerating Growth: SSM's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: SSM had negative earnings growth (-40.6%) over the past year, making it difficult to compare to the Construction industry average (25%).


Return on Equity

High ROE: SSM's Return on Equity (9.1%) is considered low.


Financial Health

How is Service Stream's financial position?


Financial Position Analysis

Short Term Liabilities: SSM's short term assets (A$197.5M) exceed its short term liabilities (A$142.2M).

Long Term Liabilities: SSM's short term assets (A$197.5M) exceed its long term liabilities (A$81.9M).


Debt to Equity History and Analysis

Debt Level: SSM's debt to equity ratio (10.4%) is considered satisfactory.

Reducing Debt: Insufficient data to determine if SSM's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: SSM's debt is well covered by operating cash flow (134.8%).

Interest Coverage: SSM's interest payments on its debt are well covered by EBIT (20.3x coverage).


Balance Sheet


Dividend

What is Service Stream current dividend yield, its reliability and sustainability?

4.98%

Forecast Dividend Yield


Dividend Yield vs Market

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

High Dividend: Unable to evaluate SSM'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 SSM's dividends per share have been stable in the past.

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


Current Payout to Shareholders

Dividend Coverage: SSM is not paying a notable dividend for the Australian market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of SSM'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?

2.6yrs

Average management tenure


CEO

Leigh MacKender

7.33yrs

Tenure

AU$1,065,494

Compensation

Mr. Leigh Mackender, BEng (Civil) (Syd) has been Managing Director of Service Stream Limited since May 26, 2014 and serves as its Executive Director. He served as its Executive General Manager of AMRS from...


CEO Compensation Analysis

Compensation vs Market: Leigh's total compensation ($USD776.15K) is about average for companies of similar size in the Australian market ($USD754.90K).

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


Leadership Team

Experienced Management: SSM's management team is considered experienced (2.6 years average tenure).


Board Members

Experienced Board: SSM's board of directors are considered experienced (6.5 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: SSM insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 35.8%.


Top Shareholders

Company Information

Service Stream Limited's employee growth, exchange listings and data sources


Key Information

  • Name: Service Stream Limited
  • Ticker: SSM
  • Exchange: ASX
  • Founded: 1996
  • Industry: Construction and Engineering
  • Sector: Capital Goods
  • Market Cap: AU$455.245m
  • Shares outstanding: 555.18m
  • Website: https://www.servicestream.com.au

Number of Employees


Location

  • Service Stream Limited
  • 357 Collins Street
  • Level 4
  • Melbourne
  • Victoria
  • 3000
  • Australia

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/09/28 08:06
End of Day Share Price2021/09/28 00:00
Earnings2021/06/30
Annual Earnings2021/06/30


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.