Shine Justice (ASX:SHJ) - Share price, News & Analysis

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

SHJ (A$1.1) is trading below our estimate of [[fair value]] (A$1.87)

SHJ fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	3/6
Past Performance	4/6
Financial Health	6/6
Dividends	3/6

SHJ Stock Overview

Shine Justice Ltd, through its subsidiaries, provides damages-based plaintiff litigation legal and insurance recovery consulting services in Australia and New Zealand.

Rewards

Trading at 41.2% below our estimate of its fair value

Earnings are forecast to grow 9.45% per year

Earnings have grown 7.1% per year over the past 5 years

Risk Analysis

Unstable dividend track record

Shine Justice Competitors

Mayfield Childcare

ASX:MFD

AU$88.6m

Slater and Gordon

ASX:SGH

AU$74.3m

iSelect

ASX:ISU

AU$46.8m

InvoCare

ASX:IVC

AU$1.6b

Price History & Performance

Summary of all time highs, changes and price drops for Shine Justice
Historical stock prices
Current Share Price	AU$1.10
52 Week High	AU$1.61
52 Week Low	AU$0.82
Beta	0.29
1 Month Change	2.80%
3 Month Change	1.85%
1 Year Change	3.77%
3 Year Change	41.94%
5 Year Change	58.27%
Change since IPO	-27.39%

Shareholder Returns

	SHJ	AU Consumer Services	AU Market
7D	-1.8%	-1.1%	1.0%
1Y	3.8%	-6.3%	-7.9%

Return vs Industry: SHJ exceeded the Australian Consumer Services industry which returned -6.3% over the past year.

Return vs Market: SHJ exceeded the Australian Market which returned -7.9% over the past year.

Price Volatility

Is SHJ's price volatile compared to industry and market?
SHJ volatility
SHJ Average Weekly Movement	5.2%
Consumer Services Industry Average Movement	7.9%
Market Average Movement	10.6%
10% most volatile stocks in AU Market	17.5%
10% least volatile stocks in AU Market	4.7%

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

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

About the Company

Founded	Employees	CEO	Website
1976	978	Simon Morrison	https://www.shinejustice.com.au

Shine Justice Ltd, through its subsidiaries, provides damages-based plaintiff litigation legal and insurance recovery consulting services in Australia and New Zealand. It operates through two segments, Personal Injury and New Practice Areas. The Personal Injury segment provides services related to public liability, workers' compensation, and motor vehicle accidents.

Shine Justice Fundamentals Summary

How do Shine Justice's earnings and revenue compare to its market cap?
SHJ fundamental statistics
Market Cap	AU$191.62m
Earnings (TTM)	AU$28.52m
Revenue (TTM)	AU$205.49m

6.7x

P/E Ratio

0.9x

P/S Ratio

Is SHJ overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
SHJ income statement (TTM)
Revenue	AU$205.49m
Cost of Revenue	AU$107.56m
Gross Profit	AU$97.94m
Other Expenses	AU$69.42m
Earnings	AU$28.52m

Last Reported Earnings

Dec 31, 2021

Next Earnings Date

Aug 26, 2022

Earnings per share (EPS)	0.16
Gross Margin	47.66%
Net Profit Margin	13.88%
Debt/Equity Ratio	17.8%

How did SHJ perform over the long term?

See historical performance and comparison

Dividends

5.2%

Current Dividend Yield

35%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

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

Valuation Score

5/6

Valuation Score 5/6

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

Key Valuation Metric

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

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for SHJ. This is calculated by dividing SHJ's market cap by their current preferred multiple.
What is SHJ's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	AU$191.62m

SHJ 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	1.2x
Enterprise Value/EBITDA	5x
PEG Ratio	0.7x

Price to Earnings Ratio vs Peers

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

SHJ PE Ratio vs Peers

The above table shows the PE ratio for SHJ vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	24.4x
MFD Mayfield Childcare	34.4x	57.8%	AU$88.6m
SGH Slater and Gordon	20.1x	n/a	AU$74.3m
ISU iSelect	23.1x	n/a	AU$46.8m
IVC InvoCare	19.8x	1.0%	AU$1.6b
SHJ Shine Justice	6.7x	9.5%	AU$191.6m

Price-To-Earnings vs Peers: SHJ is good value based on its Price-To-Earnings Ratio (6.7x) compared to the peer average (24.4x).

Price to Earnings Ratio vs Industry

How does SHJ's PE Ratio compare vs other companies in the Global Consumer Services Industry?

Price-To-Earnings vs Industry: SHJ is good value based on its Price-To-Earnings Ratio (6.7x) compared to the Global Consumer Services industry average (17.7x)

Price to Earnings Ratio vs Fair Ratio

What is SHJ'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.

SHJ PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	6.7x
Fair PE Ratio	19.2x

Price-To-Earnings vs Fair Ratio: SHJ is good value based on its Price-To-Earnings Ratio (6.7x) compared to the estimated Fair Price-To-Earnings Ratio (19.2x).

Share Price vs Fair Value

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

Below Fair Value: SHJ (A$1.1) is trading below our estimate of fair value (A$1.87)

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

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Insufficient data to show price forecast.

Discover undervalued companies

Future Growth

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

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

9.5%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: SHJ's forecast earnings growth (9.5% per year) is above the savings rate (1.8%).

Earnings vs Market: SHJ's earnings (9.5% per year) are forecast to grow faster than the Australian market (6.2% per year).

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

Revenue vs Market: SHJ's revenue (6% per year) is forecast to grow faster than the Australian market (5.7% per year).

High Growth Revenue: SHJ's revenue (6% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: SHJ's Return on Equity is forecast to be low in 3 years time (11.4%).

Discover growth companies

Past Performance

How has Shine Justice performed over the past 5 years?

Past Performance Score

4/6

Past Performance Score 4/6

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

7.1%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: SHJ has high quality earnings.

Growing Profit Margin: SHJ's current net profit margins (13.9%) are higher than last year (12.2%).

Past Earnings Growth Analysis

Earnings Trend: SHJ's earnings have grown by 7.1% per year over the past 5 years.

Accelerating Growth: SHJ's earnings growth over the past year (25.4%) exceeds its 5-year average (7.1% per year).

Earnings vs Industry: SHJ earnings growth over the past year (25.4%) underperformed the Consumer Services industry 25.4%.

Return on Equity

High ROE: SHJ's Return on Equity (10.9%) is considered low.

Discover strong past performing companies

Financial Health

How is Shine Justice'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: SHJ's short term assets (A$281.7M) exceed its short term liabilities (A$119.5M).

Long Term Liabilities: SHJ's short term assets (A$281.7M) exceed its long term liabilities (A$191.9M).

Debt to Equity History and Analysis

Debt Level: SHJ's net debt to equity ratio (1.4%) is considered satisfactory.

Reducing Debt: SHJ's debt to equity ratio has reduced from 25% to 17.8% over the past 5 years.

Debt Coverage: SHJ's debt is well covered by operating cash flow (42.1%).

Interest Coverage: SHJ's interest payments on its debt are well covered by EBIT (8.5x coverage).

Balance Sheet

Discover healthy companies

Dividend

What is Shine Justice current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

5.23%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: SHJ's dividend (5.23%) is higher than the bottom 25% of dividend payers in the Australian market (2.62%).

High Dividend: SHJ's dividend (5.23%) is low compared to the top 25% of dividend payers in the Australian market (6.24%).

Stability and Growth of Payments

Stable Dividend: SHJ has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: SHJ's dividend payments have increased, but the company has only paid a dividend for 9 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (34.9%), SHJ's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonable cash payout ratio (69.2%), SHJ's dividend payments are covered by cash flows.

Discover strong dividend paying companies

Management

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

5.8yrs

Average management tenure

CEO

Simon Morrison (53 yo)

10.58yrs

Tenure

AU$564,167

Compensation

Mr. Simon Michael Morrison, LLB serves as Managing Director at Shine Lawyers Limited. Mr. Morrison is the Co-Founder of Shine Justice Ltd (formerly known as Shine Corporate Ltd). He has been the Chief Exec...

CEO Compensation Analysis

Compensation vs Market: Simon's total compensation ($USD388.92K) is above average for companies of similar size in the Australian market ($USD279.73K).

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

Leadership Team

Experienced Management: SHJ's management team is seasoned and experienced (5.8 years average tenure).

Board Members

Experienced Board: SHJ's board of directors are not considered experienced ( 2.5 years average tenure), which suggests a new board.

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	2022/08/07 00:00
End of Day Share Price	2022/08/05 00:00
Earnings	2021/12/31
Annual Earnings	2021/06/30