Ainsworth Game Technology (ASX:AGI) - Share price, News & Analysis

Q: What is the Fair Price of AGI when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

AGI (A$0.94) is trading below our estimate of [[fair value]] (A$1.18)

AGI fundamental analysis
Snowflake Score
Valuation	2/6
Future Growth	3/6
Past Performance	1/6
Financial Health	6/6
Dividends	0/6

AGI Stock Overview

Ainsworth Game Technology Limited designs, develops, manufactures, leases, sells, and services gaming machines, and other related equipment and services.

Rewards

Trading at 20.1% below our estimate of its fair value

Earnings are forecast to grow 11.34% per year

Became profitable this year

Risk Analysis

Large one-off items impacting financial results

Ainsworth Game Technology Competitors

Jumbo Interactive

ASX:JIN

AU$913.8m

Reef Casino Trust

ASX:RCT

AU$73.5m

Tabcorp Holdings

ASX:TAH

AU$2.4b

Aquis Entertainment

ASX:AQS

AU$22.2m

Price History & Performance

Summary of all time highs, changes and price drops for Ainsworth Game Technology
Historical stock prices
Current Share Price	AU$0.94
52 Week High	AU$1.47
52 Week Low	AU$0.88
Beta	1.33
1 Month Change	-11.32%
3 Month Change	-15.70%
1 Year Change	-20.34%
3 Year Change	36.23%
5 Year Change	-58.41%
Change since IPO	-21.01%

Recent News & Updates

May 02

Ainsworth Game Technology (ASX:AGI) Has A Rock Solid Balance Sheet

Some say volatility, rather than debt, is the best way to think about risk as an investor, but Warren Buffett famously...

Mar 02

Ainsworth Game Technology's (ASX:AGI) Strong Earnings Are Of Good Quality

The subdued stock price reaction suggests that Ainsworth Game Technology Limited's ( ASX:AGI ) strong earnings didn't...

Shareholder Returns

	AGI	AU Hospitality	AU Market
7D	-5.1%	2.4%	-0.5%
1Y	-20.3%	-28.8%	-12.2%

Return vs Industry: AGI exceeded the Australian Hospitality industry which returned -28.8% over the past year.

Return vs Market: AGI underperformed the Australian Market which returned -12.2% over the past year.

Price Volatility

Is AGI's price volatile compared to industry and market?
AGI volatility
AGI Average Weekly Movement	7.0%
Hospitality Industry Average Movement	6.7%
Market Average Movement	9.9%
10% most volatile stocks in AU Market	16.6%
10% least volatile stocks in AU Market	4.4%

Stable Share Price: AGI is not significantly more volatile than the rest of Australian stocks over the past 3 months, typically moving +/- 7% a week.

Volatility Over Time: AGI's weekly volatility (7%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1995	n/a	Harald Michael Neumann	https://www.agtslots.com

Ainsworth Game Technology Limited designs, develops, manufactures, leases, sells, and services gaming machines, and other related equipment and services. The company operates in the on-line real money and social gaming markets. It has operations in Australia, North America, Latin America, Europe, New Zealand, and Asia.

Ainsworth Game Technology Fundamentals Summary

How do Ainsworth Game Technology's earnings and revenue compare to its market cap?
AGI fundamental statistics
Market Cap	AU$316.59m
Earnings (TTM)	AU$5.74m
Revenue (TTM)	AU$188.14m

55.1x

P/E Ratio

1.7x

P/S Ratio

Is AGI overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
AGI income statement (TTM)
Revenue	AU$188.14m
Cost of Revenue	AU$73.36m
Gross Profit	AU$114.78m
Other Expenses	AU$109.03m
Earnings	AU$5.74m

Last Reported Earnings

Dec 31, 2021

Next Earnings Date

n/a

Earnings per share (EPS)	0.017
Gross Margin	61.01%
Net Profit Margin	3.05%
Debt/Equity Ratio	4.6%

How did AGI perform over the long term?

See historical performance and comparison

We’ve recently updated our valuation analysis.

Valuation

Is AGI undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for AGI?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for AGI. This is calculated by dividing AGI's market cap by their current preferred multiple.
What is AGI's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	AU$316.59m

AGI key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	1.6x
Enterprise Value/EBITDA	6x
PEG Ratio	4.9x

Price to Earnings Ratio vs Peers

How does AGI's PE Ratio compare to its peers?

AGI PE Ratio vs Peers

The above table shows the PE ratio for AGI vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	36.5x
JIN Jumbo Interactive	30.3x	15.4%	AU$913.8m
RCT Reef Casino Trust	10x	n/a	AU$73.5m
TAH Tabcorp Holdings	9.2x	-0.4%	AU$2.4b
AQS Aquis Entertainment	96.8x	n/a	AU$22.2m
AGI Ainsworth Game Technology	55.1x	11.3%	AU$316.6m

Forward PE

Price-To-Earnings vs Peers: AGI is expensive based on its Price-To-Earnings Ratio (55.1x) compared to the peer average (36.5x).

Price to Earnings Ratio vs Industry

How does AGI's PE Ratio compare vs other companies in the Global Hospitality Industry?

Price-To-Earnings vs Industry: AGI is expensive based on its Price-To-Earnings Ratio (55.1x) compared to the Global Hospitality industry average (21.8x)

Price to Earnings Ratio vs Fair Ratio

What is AGI's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

AGI PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	55.1x
Fair PE Ratio	20.6x

Price-To-Earnings vs Fair Ratio: AGI is expensive based on its Price-To-Earnings Ratio (55.1x) compared to the estimated Fair Price-To-Earnings Ratio (20.6x).

Share Price vs Fair Value

What is the Fair Price of AGI when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: AGI (A$0.94) is trading below our estimate of fair value (A$1.18)

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

Price to Earnings Growth Ratio

PEG Ratio: AGI is poor value based on its PEG Ratio (4.9x)

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Future Growth

How is Ainsworth Game Technology forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

Future Growth Score

3/6

Future Growth Score 3/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

11.3%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: AGI's forecast earnings growth (11.3% per year) is above the savings rate (1.8%).

Earnings vs Market: AGI's earnings (11.3% per year) are forecast to grow faster than the Australian market (5.7% per year).

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

Revenue vs Market: AGI's revenue (10.5% per year) is forecast to grow faster than the Australian market (5.2% per year).

High Growth Revenue: AGI's revenue (10.5% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: AGI's Return on Equity is forecast to be low in 3 years time (3.6%).

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Past Performance

How has Ainsworth Game Technology performed over the past 5 years?

Past Performance Score

1/6

Past Performance Score 1/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-62.2%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: AGI has a large one-off loss of A$29.4M impacting its December 31 2021 financial results.

Growing Profit Margin: AGI became profitable in the past.

Past Earnings Growth Analysis

Earnings Trend: AGI's earnings have declined by 62.2% per year over the past 5 years.

Accelerating Growth: AGI has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: AGI has become profitable in the last year, making it difficult to compare its past year earnings growth to the Hospitality industry (47.1%).

Return on Equity

High ROE: AGI's Return on Equity (1.9%) is considered low.

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Financial Health

How is Ainsworth Game Technology's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: AGI's short term assets (A$187.3M) exceed its short term liabilities (A$49.0M).

Long Term Liabilities: AGI's short term assets (A$187.3M) exceed its long term liabilities (A$30.8M).

Debt to Equity History and Analysis

Debt Level: AGI has more cash than its total debt.

Reducing Debt: AGI's debt to equity ratio has reduced from 21.1% to 4.6% over the past 5 years.

Debt Coverage: AGI's debt is well covered by operating cash flow (362.7%).

Interest Coverage: AGI earns more interest than it pays, so coverage of interest payments is not a concern.

Balance Sheet

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Dividend

What is Ainsworth Game Technology current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

1.99%

Forecast Dividend Yield

Dividend Yield vs Market

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

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

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

Earnings Payout to Shareholders

Earnings Coverage: AGI is not paying a notable dividend for the Australian market.

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as AGI has not reported any payouts.

Discover strong dividend paying companies

Management

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

14.3yrs

Average management tenure

CEO

Harald Michael Neumann (60 yo)

0.75

Tenure

Magistrate Harald Michael Karl Neumann served as the Spokesman of the Management Team at NOVOMATIC Gaming Industries GmbH. He serves as Chief Executive Officer at Ainsworth Game Technology Ltd. since Octob...

Leadership Team

Experienced Management: AGI's management team is seasoned and experienced (14.3 years average tenure).

Board Members

Experienced Board: AGI's board of directors are seasoned and experienced ( 10.8 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.

Recent Insider Transactions

Ownership Breakdown

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

Data	Last Updated (UTC time)
Company Analysis	2022/07/02 00:00
End of Day Share Price	2022/07/01 00:00
Earnings	2021/12/31
Annual Earnings	2021/06/30