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GEM

G8 EducationASX:GEM Stock Report

Market Cap

AU$906.7m

7D

-1.8%

1Y

-10.8%

Updated

28 Nov, 2021

Data

Company Financials +
GEM fundamental analysis
Snowflake Score
Valuation5/6
Future Growth2/6
Past Performance1/6
Financial Health3/6
Dividends0/6

GEM Stock Overview

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

G8 Education Competitors

Think Childcare Group

ASX:TNK

AU$196.4m

MindChamps PreSchool

SGX:CNE

S$51.9m

Mayfield Childcare

ASX:MFD

AU$37.3m

Price History & Performance

Summary of all time highs, changes and price drops for G8 Education
Historical stock prices
Current Share PriceAU$1.07
52 Week HighAU$1.31
52 Week LowAU$0.92
Beta1.15
1 Month Change-2.73%
3 Month Change7.00%
1 Year Change-10.83%
3 Year Change-61.79%
5 Year Change-67.38%
Change since IPO137.78%

Recent News & Updates

Oct 08
We Think G8 Education (ASX:GEM) Can Stay On Top Of Its Debt

We Think G8 Education (ASX:GEM) Can Stay On Top Of Its Debt

David Iben put it well when he said, 'Volatility is not a risk we care about. What we care about is avoiding the...

Sep 17
Is It Time To Consider Buying G8 Education Limited (ASX:GEM)?

Is It Time To Consider Buying G8 Education Limited (ASX:GEM)?

While G8 Education Limited ( ASX:GEM ) might not be the most widely known stock at the moment, it saw a decent share...

May 02
G8 Education Limited (ASX:GEM) Shares Could Be 28% Below Their Intrinsic Value Estimate

G8 Education Limited (ASX:GEM) Shares Could Be 28% Below Their Intrinsic Value Estimate

Does the May share price for G8 Education Limited ( ASX:GEM ) reflect what it's really worth? Today, we will estimate...

Shareholder Returns

GEMAU Consumer ServicesAU Market
7D-1.8%-3.4%-1.6%
1Y-10.8%33.4%11.8%

Return vs Industry: GEM underperformed the Australian Consumer Services industry which returned 33.4% over the past year.

Return vs Market: GEM underperformed the Australian Market which returned 11.8% over the past year.

Price Volatility

Is GEM's price volatile compared to industry and market?
GEM volatility
GEM Average Weekly Movement4.2%
Consumer Services Industry Average Movement5.2%
Market Average Movement8.3%
10% most volatile stocks in AU Market15.8%
10% least volatile stocks in AU Market3.7%

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 (4%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
20067,417Gary Carrollhttps://www.g8education.edu.au

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.

G8 Education Fundamentals Summary

How do G8 Education's earnings and revenue compare to its market cap?
GEM fundamental statistics
Market CapAU$906.71m
Earnings (TTM)AU$82.19m
Revenue (TTM)AU$889.67m

11.0x

P/E Ratio

1.0x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
GEM income statement (TTM)
RevenueAU$889.67m
Cost of RevenueAU$590.77m
Gross ProfitAU$298.90m
ExpensesAU$216.71m
EarningsAU$82.19m

Last Reported Earnings

Jun 30, 2021

Next Earnings Date

Feb 22, 2022

Earnings per share (EPS)0.097
Gross Margin33.60%
Net Profit Margin9.24%
Debt/Equity Ratio10.5%

How did GEM perform over the long term?

See historical performance and comparison

Valuation

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

5.3%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: GEM (A$1.07) is trading below our estimate of fair value (A$1.13)

Significantly Below Fair Value: GEM is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: GEM is good value based on its PE Ratio (11x) compared to the Australian Consumer Services industry average (28.9x).

PE vs Market: GEM is good value based on its PE Ratio (11x) compared to the Australian market (18.7x).


Price to Earnings Growth Ratio

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


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 (2.8x).


Future Growth

How is G8 Education forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

13.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: GEM's forecast earnings growth (13.8% per year) is above the savings rate (1.9%).

Earnings vs Market: GEM's earnings (13.8% per year) are forecast to grow faster than the Australian market (11.6% per year).

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

Revenue vs Market: GEM's revenue (4.8% per year) is forecast to grow slower than the Australian market (5.2% per year).

High Growth Revenue: GEM's revenue (4.8% 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 (8.3%).


Past Performance

How has G8 Education performed over the past 5 years?

-45.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: GEM has a large one-off gain of A$20.9M impacting its June 30 2021 financial results.

Growing Profit Margin: GEM became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: GEM's earnings have declined by 45.9% per year over the past 5 years.

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

Earnings vs Industry: GEM has become profitable in the last year, making it difficult to compare its past year earnings growth to the Consumer Services industry (43.2%).


Return on Equity

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


Financial Health

How is G8 Education's financial position?


Financial Position Analysis

Short Term Liabilities: GEM's short term assets (A$137.7M) do not cover its short term liabilities (A$265.3M).

Long Term Liabilities: GEM's short term assets (A$137.7M) do not cover its long term liabilities (A$704.5M).


Debt to Equity History and Analysis

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

Reducing Debt: GEM's debt to equity ratio has reduced from 66% to 10.5% over the past 5 years.

Debt Coverage: GEM's debt is well covered by operating cash flow (188.7%).

Interest Coverage: GEM's interest payments on its debt are not well covered by EBIT (2.6x coverage).


Balance Sheet


Dividend

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

4.17%

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?

3.5yrs

Average management tenure


CEO

Gary Carroll

4.83yrs

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 ($USD591.37K) is below average for companies of similar size in the Australian market ($USD965.91K).

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


Leadership Team

Experienced Management: GEM's management team is considered experienced (3.5 years average tenure).


Board Members

Experienced Board: GEM's board of directors are considered experienced (4.5 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.


Top Shareholders

Company Information

G8 Education Limited's 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$906.708m
  • 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


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/11/28 07:04
End of Day Share Price2021/11/26 00:00
Earnings2021/06/30
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.