ASX:TNK

Stock Analysis Report

Executive Summary

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

Snowflake

Fundamentals

Very 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

0%

TNK

2.4%

AU Consumer Services

0.7%

AU Market


1 Year Return

2.4%

TNK

27.5%

AU Consumer Services

11.0%

AU Market

Return vs Industry: TNK underperformed the Australian Consumer Services industry which returned 27.5% over the past year.

Return vs Market: TNK underperformed the Australian Market which returned 11% over the past year.


Shareholder returns

TNKIndustryMarket
7 Day0%2.4%0.7%
30 Day-4.8%4.3%-0.2%
90 Day-14.7%-11.1%-0.1%
1 Year8.0%2.4%31.2%27.5%17.4%11.0%
3 Year-30.7%-38.8%-20.0%-28.3%36.3%18.0%
5 Yearn/a-17.0%-32.6%51.4%17.3%

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 compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Undervalued: TNK (A$1.28) is trading below our estimate of fair value (A$3.55)

Significantly Undervalued: TNK is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: TNK is good value based on its PE Ratio (17.3x) compared to the Consumer Services industry average (17.6x).

PE vs Market: TNK is good value based on its PE Ratio (17.3x) compared to the Australian market (17.7x).


Price to Earnings Growth Ratio

Low PEG Ratio: TNK is good value based on its PEG Ratio (0.5x)


Price to Book Ratio

PB vs Industry: TNK is good value based on its PB Ratio (1.4x) compared to the AU Consumer Services industry average (1.8x).


Next Steps

Future Growth

How is Think Childcare forecast 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 Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TNK's forecast earnings growth (35.9% per year) is above the savings rate (2.3%).

Earnings vs Market: TNK's earnings (35.9% per year) are forecast to grow faster than the Australian market (10.2% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: TNK's revenue (25.3% per year) is forecast to grow faster than the Australian market (3.6% per year).

High Growth Revenue: TNK's revenue (25.3% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: TNK's Return on Equity is forecast to be low in 3 years time (14.6%).


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

Earnings Trend: TNK's earnings have grown significantly by 31.9% per year over the past 5 years.

Accelerating Growth: TNK's earnings growth over the past year (0.6%) is below its 5-year average (31.9% per year).

Earnings vs Industry: TNK earnings growth over the past year (0.6%) underperformed the Consumer Services industry 0.6%.


Return on Equity

High ROE: TNK's Return on Equity (7.1%) is considered low.


Return on Assets

ROA vs Industry: TNK's Return on Assets is below or equal to the Consumer Services industry average last year.


Return on Capital Employed

ROCE Improving: TNK's Return on Capital Employed has declined over the past 3 years.


Next Steps

Financial Health

How is Think Childcare's financial position?


Financial Position Analysis

Short Term Liabilities: TNK's short term assets (A$15.4M) do not cover its short term liabilities (A$24.5M)

Long Term Liabilities: TNK's short term assets (15.4M) do not cover its long term liabilities (136.7M)


Debt to Equity History and Analysis

Debt Level: TNK's debt to equity ratio (50.6%) is considered high

Reducing Debt: Insufficient data to determine if TNK's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: TNK's debt is well covered by operating cash flow (35.3%).

Interest Coverage: TNK's interest payments on its debt are not well covered by EBIT (1.8x coverage).


Balance Sheet

Inventory Level: TNK has a high level of physical assets or inventory.

Debt Coverage by Assets: TNK's 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?

3.13%

Current Dividend Yield


Dividend Yield vs Market

company3.1%marketbottom25%2.5%markettop25%5.6%industryaverage2.4%forecastin3Years6.7%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: TNK's dividend (3.13%) is higher than the bottom 25% of dividend payers in the Australian market (2.49%).

High Dividend: TNK's dividend (3.13%) is low compared to the top 25% of dividend payers in the Australian market (5.56%).

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

Growing Dividend: TNK has only been paying a dividend for 4 years, and since then payments have fallen.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (114.8%), TNK's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: TNK's dividends in 3 years are forecast to be covered by earnings (69.4% payout ratio).


Next Steps

Management

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

1.4yrs

Average management tenure


CEO

Mathew Edwards 0

5.1yrs

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

Compensation vs. Market: Mathew's total compensation ($USD196.92K) is about average for companies of similar size in the Australian market ($USD261.02K).

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


Management Age and Tenure

1.4yrs

Average Tenure

Experienced Management: TNK's management team is not considered experienced ( 1.4 years average tenure), which suggests a new team.


Board Age and Tenure

1.5yrs

Average Tenure

Experienced Board: TNK's board of directors are not considered experienced ( 1.5 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

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Ownership Breakdown


Management Team

  • Mathew Edwards

    MD, CEO & Director

    • Tenure: 5.1yrs
    • Compensation: AU$291.23k
  • Mourice Garbutt

    Joint Company Secretary

    • Tenure: 0yrs
  • Jennifer Saliba

    Chief Financial Officer

    • Tenure: 1.5yrs
    • Compensation: AU$406.59k
  • Kelly Allison

    People & Culture Manager

    • Tenure: 0.9yrs
  • Michelle Carlin

    Director of Marketing

    • Tenure: 0.9yrs
  • Trinh Bui

    General Counsel & Joint Company Secretary

    • Tenure: 1.4yrs

Board Members

  • Mark Kerr (61yo)

    Independent Chairman

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

    Independent Non-Executive Director

    • Tenure: 1.5yrs
    • Compensation: AU$56.25k
  • Mathew Edwards

    MD, CEO & Director

    • Tenure: 5.1yrs
    • Compensation: AU$291.23k
  • Evonne Collier

    Independent Non-Executive Director

    • Tenure: 1.5yrs
    • 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$78.513m
  • Shares outstanding: 60.86m
  • 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 Analysis2019/10/16 10:38
End of Day Share Price2019/10/16 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.