ASX:TNK

Stock Analysis Report

Executive Summary

Think Childcare Limited owns, operates, and manages childcare facilities in Australia.

Snowflake

Fundamentals

Undervalued with high growth potential.


Similar Companies

Share Price & News

How has Think Childcare's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

4.7%

ASX:TNK

-2.4%

AU Consumer Services

0.7%

AU Market


1 Year Return

-9.4%

ASX:TNK

21.8%

AU Consumer Services

6.2%

AU Market

TNK underperformed the Consumer Services industry which returned 21.8% over the past year.

TNK underperformed the Market in Australia which returned 6.2% over the past year.


Share holder returns

TNKIndustryMarket
7 Day4.7%-2.4%0.7%
30 Day9.8%-14.2%3.8%
90 Day-18.2%-15.2%0.4%
1 Year-4.4%-9.4%24.9%21.8%12.4%6.2%
3 Year-25.1%-33.8%2.0%-8.4%40.9%21.9%
5 Yearn/a-18.8%-34.3%49.8%16.3%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Think Childcare undervalued based on future cash flows and its price relative to the stock market?

>50%

Discount to future cash flow value


Intrinsic Value Based on Future Cash Flows

Think Childcare's share price is below the future cash flow value, and at a moderate discount (> 20%).

Think Childcare's share price is below the future cash flow value, and at a substantial discount (> 40%).


Price Based on Earnings

Think Childcare is overvalued based on earnings compared to the AU Consumer Services industry average.

Think Childcare is good value based on earnings compared to the Australia market.


Price Based on Expected Growth

Think Childcare is good value based on expected growth next year.


Price Based on Value of Assets

Think Childcare is good value based on assets compared to the AU Consumer Services industry average.


Next Steps

Future Growth

How is Think Childcare expected to perform in the next 1 to 3 years based on estimates from 4 analysts?

35.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Think Childcare's revenue is expected to grow significantly at over 20% yearly.

Think Childcare's earnings are expected to grow significantly at over 20% yearly.

Think Childcare's revenue growth is expected to exceed the Australia market average.

Think Childcare's earnings growth is expected to exceed the Australia market average.

Think Childcare's earnings growth is expected to exceed the low risk savings rate of 2.3%.


Earnings per Share Growth Estimates


Future Return on Equity

Think Childcare is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).


Next Steps

Past Performance

How has Think Childcare performed over the past 5 years?

31.9%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Think Childcare has delivered over 20% year on year earnings growth in the past 5 years.

Think Childcare's 1-year earnings growth is less than its 5-year average (0.6% vs 31.9%)

Think Childcare's earnings growth has not exceeded the AU Consumer Services industry average in the past year (0.6% vs 0.6%).


Return on Equity

Think Childcare has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).


Return on Assets

Think Childcare used its assets less efficiently than the AU Consumer Services industry average last year based on Return on Assets.


Return on Capital Employed

Think Childcare's use of capital deteriorated last year versus 3 years ago (Return on Capital Employed).


Next Steps

Financial Health

How is Think Childcare's financial position?


Financial Position Analysis

Think Childcare's short term (1 year) commitments are greater than its holdings of cash and other short term assets.

Think Childcare's long term commitments exceed its cash and other short term assets.


Debt to Equity History and Analysis

Think Childcare's level of debt (50.6%) compared to net worth is high (greater than 40%).

Unable to establish if Think Childcare's debt level has increased without past 5-year debt data.

Debt is well covered by operating cash flow (35.3%, greater than 20% of total debt).

Interest payments on debt are not well covered by earnings (EBIT is 1.8x annual interest expense, ideally 3x coverage).


Balance Sheet

High level of physical assets or inventory.

Debt is not covered by short term assets, assets are 0.6x debt.


Next Steps

Dividend

What is Think Childcare's current dividend yield, its reliability and sustainability?

6.36%

Expected Dividend Yield


Dividend Yield and Payments Analysis

Think Childcare's pays a higher dividend yield than the bottom 25% of dividend payers in Australia (2.47%).

Think Childcare's dividend is below the markets top 25% of dividend payers in Australia (5.58%).

Think Childcare has been paying a dividend for less than 10 years and during this time payments have been volatile (annual drop of over 20%).

Think Childcare has only been paying a dividend for 4 years, and since then dividends per share have fallen.


Current Payout to Shareholders

Dividends paid are not well covered by earnings (0.9x coverage).


Future Payout to Shareholders

Dividends after 3 years are expected to be covered by earnings (1.4x coverage).


Next Steps

Management

What is the CEO of Think Childcare's salary, the management and board of directors tenure and is there insider trading?

1.3yrs

Average management tenure


CEO

Mathew Edwards 0

5yrs

Tenure

AU$291,229

Compensation

Mr. Mathew Edwards serves as the Chief Executive Officer of Think Childcare Limited. since September 17, 2014 and serves as its Managing Director. Mr. Edwards has been involved in childcare since 2001. He  ...


CEO Compensation Analysis

Mathew's remuneration is about average for companies of similar size in Australia.

Mathew's compensation has been consistent with company performance over the past year, both up more than 20%.


Management Age and Tenure

1.3yrs

Average Tenure

The average tenure for the Think Childcare management team is less than 2 years, this suggests a new team.


Board Age and Tenure

1.4yrs

Average Tenure

The average tenure for the Think Childcare board of directors is less than 3 years, this suggests a new board.


Insider Trading

No 3 month open market individual insider trading information.


Recent Insider Transactions

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Ownership Breakdown


Management Team

  • Mathew Edwards

    MD, CEO & Director

    • Tenure: 5yrs
    • Compensation: AU$291.23k
  • Mourice Garbutt

    Joint Company Secretary

    • Tenure: 0yrs
  • Jennifer Saliba

    Chief Financial Officer

    • Tenure: 1.4yrs
    • Compensation: AU$406.59k
  • Kelly Allison

    People & Culture Manager

    • Tenure: 0.8yrs
  • Michelle Carlin

    Director of Marketing

    • Tenure: 0.8yrs
  • Trinh Bui

    General Counsel & Joint Company Secretary

    • Tenure: 1.3yrs

Board Members

  • Mark Kerr (61yo)

    Chairman

    • Tenure: 0yrs
    • Compensation: AU$130.73k
  • Joe Dicks

    Independent Non-Executive Director

    • Tenure: 1.4yrs
    • Compensation: AU$56.25k
  • Mathew Edwards

    MD, CEO & Director

    • Tenure: 5yrs
    • Compensation: AU$291.23k
  • Evonne Collier

    Independent Non-Executive Director

    • Tenure: 1.4yrs
    • Compensation: AU$56.25k

Company Information

Think Childcare Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Think Childcare Limited
  • Ticker: TNK
  • Exchange: ASX
  • Founded: 2014
  • Industry: Education Services
  • Sector: Consumer Services
  • Market Cap: AU$82.111m
  • Shares outstanding: 60.60m
  • Website: https://www.thinkchildcare.com.au

Location

  • Think Childcare Limited
  • 1 Park Avenue
  • Suite 3
  • Drummoyne
  • New South Wales
  • 2047
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
TNKASX (Australian Securities Exchange)YesOrdinary SharesAUAUDOct 2014
TNKCHIA (Chi-X Australia)YesOrdinary SharesAUAUDOct 2014

Biography

Think Childcare Limited owns, operates, and manages childcare facilities in Australia. The company operates and manages approximately 78 long day childcare facilities for children between the ages of 6 wee ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/09/19 10:39
End of Day Share Price2019/09/19 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


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.