ASX:GEM

Stock Analysis Report

NOT FOR DISTRIBUTION
Header cover image

Executive Summary

G8 Education Limited owns, operates, franchises, and manages child care centers in Australia. More Details


Snowflake Analysis

Adequate balance sheet with reasonable growth potential.


Similar Companies

Share Price & News

How has G8 Education's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: GEM is less volatile than 75% of Australian stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: GEM's weekly volatility has decreased from 11% to 4% over the past year.


Market Performance


7 Day Return

-1.9%

GEM

-6.2%

AU Consumer Services

-1.2%

AU Market


1 Year Return

-17.9%

GEM

21.9%

AU Consumer Services

22.6%

AU Market

Return vs Industry: GEM underperformed the Australian Consumer Services industry which returned 10% over the past year.

Return vs Market: GEM underperformed the Australian Market which returned 12.7% over the past year.


Shareholder returns

GEMIndustryMarket
7 Day-1.9%-6.2%-1.2%
30 Day-13.4%-3.0%-1.9%
90 Day-16.3%3.1%1.5%
1 Year-10.7%-17.9%24.0%21.9%26.6%22.6%
3 Year-54.8%-62.5%35.0%23.2%27.4%11.9%
5 Year-60.4%-71.8%3.9%-12.5%59.9%28.5%

Long-Term Price Volatility Vs. Market

How volatile is G8 Education's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is G8 Education undervalued compared to its fair value and its price relative to the market?

23.9%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: GEM (A$1.03) is trading below our estimate of fair value (A$1.35)

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


Price To Earnings Ratio

PE vs Industry: GEM is unprofitable, so we can't compare its PE Ratio to the AU Consumer Services industry average.

PE vs Market: GEM 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 GEM's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: GEM is good value based on its PB Ratio (1x) compared to the AU Consumer Services industry average (1.9x).


Next Steps

Future Growth

How is G8 Education forecast to perform in the next 1 to 3 years based on estimates from 11 analysts?

61.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: GEM is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (2%).

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

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

Revenue vs Market: GEM's revenue (6.9% per year) is forecast to grow faster than the Australian market (5.6% per year).

High Growth Revenue: GEM's revenue (6.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: GEM's Return on Equity is forecast to be low in 3 years time (8.2%).


Next Steps

Past Performance

How has G8 Education performed over the past 5 years?

-50.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: GEM is currently unprofitable.

Growing Profit Margin: GEM is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: GEM is unprofitable, and losses have increased over the past 5 years at a rate of 50.6% per year.

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

Earnings vs Industry: GEM is unprofitable, making it difficult to compare its past year earnings growth to the Consumer Services industry (-2.3%).


Return on Equity

High ROE: GEM has a negative Return on Equity (-21.38%), as it is currently unprofitable.


Next Steps

Financial Health

How is G8 Education's financial position?


Financial Position Analysis

Short Term Liabilities: GEM's short term assets (A$344.6M) exceed its short term liabilities (A$275.8M).

Long Term Liabilities: GEM's short term assets (A$344.6M) do not cover its long term liabilities (A$923.8M).


Debt to Equity History and Analysis

Debt Level: GEM's debt to equity ratio (33.7%) is considered satisfactory.

Reducing Debt: GEM's debt to equity ratio has reduced from 85.2% to 33.7% over the past 5 years.

Debt Coverage: GEM's debt is well covered by operating cash flow (64.2%).

Interest Coverage: GEM is unprofitable, therefore interest payments are not well covered by earnings.


Balance Sheet


Next Steps

Dividend

What is G8 Education current dividend yield, its reliability and sustainability?

4.75%

Forecast Dividend Yield


Dividend Yield vs Market

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

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

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


Current Payout to Shareholders

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


Future Payout to Shareholders

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

3.3yrs

Average management tenure


CEO

Gary Carroll

4.17yrs

Tenure

AU$830,809

Compensation

Mr. Gary G. Carroll, B.Comm (Hons), B.Law (Hons), CPA, has been Chief Executive Officer, Managing Director and Executive Director of G8 Education Limited since January 1, 2017. Mr. Carroll is responsible f...


CEO Compensation Analysis

Compensation vs Market: Gary's total compensation ($USD635.95K) is below average for companies of similar size in the Australian market ($USD925.61K).

Compensation vs Earnings: Gary's compensation has increased whilst the company is unprofitable.


Leadership Team

NamePositionTenureCompensationOwnership
Gary Carroll
CEO, MD & Executive Director4.17yrsAU$830.81k0.021%
A$ 179.8k
Sharyn Williams
Chief Financial Officer4.08yrsAU$441.43k0.0077%
A$ 67.4k
Malcolm Ashcroft
Chief Operating Officerno datano datano data
Peter Nelson
Chief Information Officerno datano datano data
Tracey Wood
General Counsel & Company Secretary2.83yrsno datano data
Greg Bowell
General Manager of Marketing3.33yrsno datano data
Tabitha Pearson
Chief People & Transformation Officer0.42yrno datano data

3.3yrs

Average Tenure

Experienced Management: GEM's management team is considered experienced (3.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Gary Carroll
CEO, MD & Executive Director4.17yrsAU$830.81k0.021%
A$ 179.8k
David Foster
Independent Non Executive Director5.08yrsAU$148.75k0.0065%
A$ 56.7k
Peter Trimble
Independent Non-Executive Director0.83yrAU$90.24k0.0059%
A$ 51.5k
Susan Forrester
Independent Non-Executive Director9.33yrsAU$148.75k0.0061%
A$ 53.5k
Mark Johnson
Independent Non-Executive Chairman5.17yrsAU$257.31k0.012%
A$ 103.0k
Margaret Zabel
Independent Non-Executive Director3.5yrsAU$126.22k0.0034%
A$ 29.9k
Julie Cogin
Independent Non-Executive Director3.5yrsAU$126.22k0.0039%
A$ 34.0k

4.2yrs

Average Tenure

52yo

Average Age

Experienced Board: GEM's board of directors are considered experienced (4.2 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 been substantially diluted in the past year, with total shares outstanding growing by 84.1%.


Top Shareholders

Company Information

G8 Education Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: G8 Education Limited
  • Ticker: GEM
  • Exchange: ASX
  • Founded: 2006
  • Industry: Education Services
  • Sector: Consumer Services
  • Market Cap: AU$872.812m
  • Shares outstanding: 847.39m
  • Website: https://www.g8education.edu.au

Number of Employees


Location

  • G8 Education Limited
  • 159 Varsity Parade
  • Varsity Lakes
  • Queensland
  • 4227
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
GEMASX (Australian Securities Exchange)YesOrdinary SharesAUAUDMar 2010
GEMCHIA (Chi-X Australia)YesOrdinary SharesAUAUDMar 2010
3EAGDB (Deutsche Boerse AG)YesOrdinary SharesDEEURMar 2010
GEDU.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDMar 2010

Biography

G8 Education Limited owns, operates, franchises, and manages child care centers in Australia. The company provides educational child care services. As of December 31, 2020, it operated 472 centers. The com...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/03/09 07:02
End of Day Share Price2021/03/09 00:00
Earnings2020/12/31
Annual Earnings2020/12/31


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.