Bubs Australia (ASX:BUB) - Share price, News & Analysis

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

BUB (A$0.63) is trading below our estimate of [[fair value]] (A$3.01)

BUB fundamental analysis
Snowflake Score
Valuation	2/6
Future Growth	5/6
Past Performance	0/6
Financial Health	4/6
Dividends	0/6

BUB Stock Overview

Bubs Australia Limited, together with its subsidiaries, engages in the production and sale of various infant nutrition products in Australia, China, and internationally.

Rewards

Trading at 79.2% below our estimate of its fair value

Earnings are forecast to grow 59.46% per year

Risk Analysis

Volatile share price over the past 3 months

Shareholders have been diluted in the past year

Bubs Australia Competitors

Ricegrowers

ASX:SGLLV

AU$455.8m

Cobram Estate Olives

ASX:CBO

AU$565.8m

United Malt Group

ASX:UMG

AU$954.9m

Tassal Group

ASX:TGR

AU$1.1b

Price History & Performance

Summary of all time highs, changes and price drops for Bubs Australia
Historical stock prices
Current Share Price	AU$0.63
52 Week High	AU$0.86
52 Week Low	AU$0.34
Beta	0.84
1 Month Change	12.61%
3 Month Change	68.92%
1 Year Change	52.44%
3 Year Change	-48.77%
5 Year Change	-8.76%
Change since IPO	362.96%

Shareholder Returns

	BUB	AU Food	AU Market
7D	7.8%	3.8%	0.7%
1Y	52.4%	-12.3%	-8.0%

Return vs Industry: BUB exceeded the Australian Food industry which returned -12.3% over the past year.

Return vs Market: BUB exceeded the Australian Market which returned -8% over the past year.

Price Volatility

Is BUB's price volatile compared to industry and market?
BUB volatility
BUB Average Weekly Movement	15.4%
Food Industry Average Movement	6.6%
Market Average Movement	10.5%
10% most volatile stocks in AU Market	17.6%
10% least volatile stocks in AU Market	4.6%

Stable Share Price: BUB is more volatile than 75% of Australian stocks over the past 3 months, typically moving +/- 15% a week.

Volatility Over Time: BUB's weekly volatility (15%) has been stable over the past year, but is still higher than 75% of Australian stocks.

About the Company

Founded	Employees	CEO	Website
1993	41	Kristy-Lee Carr	https://www.bubsaustralia.com

Bubs Australia Limited, together with its subsidiaries, engages in the production and sale of various infant nutrition products in Australia, China, and internationally. It offers organic baby food, goat milk and organic cow’s milk infant formula, adult goat milk powder, and fresh dairy products, as well as pouches, cereals, and snacks under the Bubs and CapriLac brands. The company also provides children’s vitamin and mineral supplement products under the Vita Bubs name; canning services for nutritional dairy products; and holds IP and trademarks.

Bubs Australia Fundamentals Summary

How do Bubs Australia's earnings and revenue compare to its market cap?
BUB fundamental statistics
Market Cap	AU$455.06m
Earnings (TTM)	-AU$62.44m
Revenue (TTM)	AU$54.65m

8.4x

P/S Ratio

-7.3x

P/E Ratio

Is BUB overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
BUB income statement (TTM)
Revenue	AU$54.65m
Cost of Revenue	AU$47.69m
Gross Profit	AU$6.97m
Other Expenses	AU$69.41m
Earnings	-AU$62.44m

Last Reported Earnings

Dec 31, 2021

Next Earnings Date

n/a

Earnings per share (EPS)	-0.085
Gross Margin	12.75%
Net Profit Margin	-114.25%
Debt/Equity Ratio	2.3%

How did BUB perform over the long term?

See historical performance and comparison

We’ve recently updated our valuation analysis.

Valuation

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

Valuation Score

2/6

Valuation Score 2/6

Price-To-Sales vs Peers
Price-To-Sales vs Industry
Price-To-Sales 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 BUB?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for BUB. This is calculated by dividing BUB's market cap by their current preferred multiple.
What is BUB's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	AU$455.06m

BUB 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	7.8x
Enterprise Value/EBITDA	-32.5x
PEG Ratio	n/a

Price to Sales Ratio vs Peers

How does BUB's PS Ratio compare to its peers?

BUB PS Ratio vs Peers

The above table shows the PS ratio for BUB vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PS	Estimated Growth	Market Cap
Peer Average	1.7x
SGLLV Ricegrowers	0.3x	5.3%	AU$455.8m
CBO Cobram Estate Olives	4.2x	14.5%	AU$565.8m
UMG United Malt Group	0.7x	3.2%	AU$954.9m
TGR Tassal Group	1.5x	0.8%	AU$1.1b
BUB Bubs Australia	8.4x	31.3%	AU$455.1m

Price-To-Sales vs Peers: BUB is expensive based on its Price-To-Sales Ratio (8.4x) compared to the peer average (1.7x).

Price to Earnings Ratio vs Industry

How does BUB's PE Ratio compare vs other companies in the AU Food Industry?

Price-To-Sales vs Industry: BUB is expensive based on its Price-To-Sales Ratio (8.4x) compared to the Australian Food industry average (1.6x)

Price to Sales Ratio vs Fair Ratio

What is BUB's PS Ratio compared to its Fair PS Ratio? This is the expected PS Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

BUB PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio	8.4x
Fair PS Ratio	2.2x

Price-To-Sales vs Fair Ratio: BUB is expensive based on its Price-To-Sales Ratio (8.4x) compared to the estimated Fair Price-To-Sales Ratio (2.2x).

Share Price vs Fair Value

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

Below Fair Value: BUB (A$0.63) is trading below our estimate of fair value (A$3.01)

Significantly Below Fair Value: BUB 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: Target price is less than 20% higher than the current share price.

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Future Growth

How is Bubs Australia forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

Future Growth Score

5/6

Future Growth Score 5/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

59.5%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: BUB is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (1.8%).

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

High Growth Earnings: BUB is expected to become profitable in the next 3 years.

Revenue vs Market: BUB's revenue (31.3% per year) is forecast to grow faster than the Australian market (5.6% per year).

High Growth Revenue: BUB's revenue (31.3% per year) is forecast to grow faster than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: BUB's Return on Equity is forecast to be low in 3 years time (10.4%).

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Past Performance

How has Bubs Australia performed over the past 5 years?

Past Performance Score

0/6

Past Performance Score 0/6

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

-21.9%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: BUB is currently unprofitable.

Growing Profit Margin: BUB is currently unprofitable.

Past Earnings Growth Analysis

Earnings Trend: BUB is unprofitable, and losses have increased over the past 5 years at a rate of 21.9% per year.

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

Earnings vs Industry: BUB is unprofitable, making it difficult to compare its past year earnings growth to the Food industry (82.3%).

Return on Equity

High ROE: BUB has a negative Return on Equity (-72.34%), as it is currently unprofitable.

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Financial Health

How is Bubs Australia's financial position?

Financial Health Score

4/6

Financial Health Score 4/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Stable Cash Runway
Forecast Cash Runway

Financial Position Analysis

Short Term Liabilities: BUB's short term assets (A$62.7M) exceed its short term liabilities (A$20.8M).

Long Term Liabilities: BUB's short term assets (A$62.7M) exceed its long term liabilities (A$1.7M).

Debt to Equity History and Analysis

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

Reducing Debt: BUB's debt to equity ratio has increased from 0.4% to 2.3% over the past 5 years.

Balance Sheet

Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: BUB has sufficient cash runway for more than 3 years based on its current free cash flow.

Forecast Cash Runway: Insufficient data to determine if BUB has enough cash runway if its free cash flow continues to grow or shrink based on historical rates.

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Dividend

What is Bubs Australia current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

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

Dividend Yield vs Market

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

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

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

Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as BUB has not reported any payouts.

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Management

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

3.8yrs

Average management tenure

CEO

Kristy-Lee Carr

17.58yrs

Tenure

AU$633,058

Compensation

Ms. Kristy-Lee Newland Carr, BBus, founded Bubs Australia Limited in 2005 and has been its Chief Executive Officer since September 03, 2018, Executive Director since December 22, 2016 and Managing Director...

CEO Compensation Analysis

Compensation vs Market: Kristy-Lee's total compensation ($USD443.13K) is below average for companies of similar size in the Australian market ($USD797.23K).

Compensation vs Earnings: Kristy-Lee's compensation has increased whilst the company is unprofitable.

Leadership Team

Experienced Management: BUB's management team is considered experienced (3.8 years average tenure).

Board Members

Experienced Board: BUB'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.

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 19.8%.

Data	Last Updated (UTC time)
Company Analysis	2022/08/09 00:00
End of Day Share Price	2022/08/09 00:00
Earnings	2021/12/31
Annual Earnings	2021/06/30