Cogstate (ASX:CGS) - Share price, News & Analysis

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

CGS (A$1.85) is trading below our estimate of [[fair value]] (A$5.96)

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

CGS Stock Overview

Rewards

Trading at 69% below our estimate of its fair value

Earnings are forecast to grow 18.74% per year

Earnings grew by 2812.4% over the past year

Risk Analysis

Large one-off items impacting financial results

Cogstate Competitors

Pro Medicus

ASX:PME

AU$5.6b

Capitol Health

ASX:CAJ

AU$338.0m

Monash IVF Group

ASX:MVF

AU$407.2m

Paragon Care

ASX:PGC

AU$225.5m

Price History & Performance

Summary of all time highs, changes and price drops for Cogstate
Historical stock prices
Current Share Price	AU$1.85
52 Week High	AU$2.68
52 Week Low	AU$1.36
Beta	0.15
1 Month Change	13.50%
3 Month Change	10.12%
1 Year Change	10.78%
3 Year Change	873.68%
5 Year Change	77.03%
Change since IPO	270.00%

Recent News & Updates

Jun 30

We Ran A Stock Scan For Earnings Growth And Cogstate (ASX:CGS) Passed With Ease

Investors are often guided by the idea of discovering 'the next big thing', even if that means buying 'story stocks...

Shareholder Returns

	CGS	AU Healthcare Services	AU Market
7D	2.8%	-2.2%	0.7%
1Y	10.8%	-18.3%	-8.5%

Return vs Industry: CGS exceeded the Australian Healthcare Services industry which returned -18.3% over the past year.

Return vs Market: CGS exceeded the Australian Market which returned -8.5% over the past year.

Price Volatility

Is CGS's price volatile compared to industry and market?
CGS volatility
CGS Average Weekly Movement	9.4%
Healthcare Services Industry Average Movement	14.4%
Market Average Movement	10.6%
10% most volatile stocks in AU Market	18.1%
10% least volatile stocks in AU Market	4.6%

Stable Share Price: CGS is not significantly more volatile than the rest of Australian stocks over the past 3 months, typically moving +/- 9% a week.

Volatility Over Time: CGS's weekly volatility (9%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1999	171	Brad O'Connor	https://www.cogstate.com

Cogstate Limited, a cognitive science company, provides computerized cognitive tests for clinical trials, academic research, healthcare, and brain health applications in Australia and internationally. The company’s services include project management, data management, scientific consulting, statistical analysis, scales procurement, rater training, and monitoring solutions. It operates in Clinical Trials and Healthcare segments.

Cogstate Fundamentals Summary

How do Cogstate's earnings and revenue compare to its market cap?
CGS fundamental statistics
Market Cap	US$227.81m
Earnings (TTM)	US$9.76m
Revenue (TTM)	US$41.91m

23.3x

P/E Ratio

5.4x

P/S Ratio

Is CGS overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
CGS income statement (TTM)
Revenue	US$41.91m
Cost of Revenue	US$16.84m
Gross Profit	US$25.07m
Other Expenses	US$15.30m
Earnings	US$9.76m

Last Reported Earnings

Dec 31, 2021

Next Earnings Date

Aug 31, 2022

Earnings per share (EPS)	0.056
Gross Margin	59.82%
Net Profit Margin	23.30%
Debt/Equity Ratio	2.7%

How did CGS perform over the long term?

See historical performance and comparison

We’ve recently updated our valuation analysis.

Valuation

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

Valuation Score

6/6

Valuation Score 6/6

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 CGS?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for CGS. This is calculated by dividing CGS's market cap by their current preferred multiple.
What is CGS's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$227.81m

CGS 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	4.9x
Enterprise Value/EBITDA	19.7x
PEG Ratio	1.2x

Price to Earnings Ratio vs Peers

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

CGS PE Ratio vs Peers

The above table shows the PE ratio for CGS vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	53.9x
PME Pro Medicus	146.2x	21.3%	AU$5.6b
CAJ Capitol Health	24.8x	15.9%	AU$338.0m
MVF Monash IVF Group	18x	13.6%	AU$407.2m
PGC Paragon Care	26.7x	n/a	AU$225.5m
CGS Cogstate	23.3x	18.7%	AU$320.7m

Price-To-Earnings vs Peers: CGS is good value based on its Price-To-Earnings Ratio (23.3x) compared to the peer average (53.9x).

Price to Earnings Ratio vs Industry

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

Price-To-Earnings vs Industry: CGS is good value based on its Price-To-Earnings Ratio (23.3x) compared to the Global Healthcare Services industry average (39.3x)

Price to Earnings Ratio vs Fair Ratio

What is CGS'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.

CGS PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	23.3x
Fair PE Ratio	32.5x

Price-To-Earnings vs Fair Ratio: CGS is good value based on its Price-To-Earnings Ratio (23.3x) compared to the estimated Fair Price-To-Earnings Ratio (32.5x).

Share Price vs Fair Value

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

Below Fair Value: CGS (A$1.85) is trading below our estimate of fair value (A$5.96)

Significantly Below Fair Value: CGS 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 more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.

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Future Growth

How is Cogstate forecast to perform in the next 1 to 3 years based on estimates from 3 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

18.7%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: CGS's forecast earnings growth (18.7% per year) is above the savings rate (1.8%).

Earnings vs Market: CGS's earnings (18.7% per year) are forecast to grow faster than the Australian market (6.2% per year).

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

Revenue vs Market: CGS's revenue (21.4% per year) is forecast to grow faster than the Australian market (5.6% per year).

High Growth Revenue: CGS's revenue (21.4% per year) is forecast to grow faster than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: CGS's Return on Equity is forecast to be high in 3 years time (23.1%)

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Past Performance

How has Cogstate performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

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

51.0%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: CGS has a large one-off gain of $2.4M impacting its December 31 2021 financial results.

Growing Profit Margin: CGS's current net profit margins (23.3%) are higher than last year (1.2%).

Past Earnings Growth Analysis

Earnings Trend: CGS's earnings have grown significantly by 51% per year over the past 5 years.

Accelerating Growth: CGS's earnings growth over the past year (2812.4%) exceeds its 5-year average (51% per year).

Earnings vs Industry: CGS earnings growth over the past year (2812.4%) exceeded the Healthcare Services industry 6.8%.

Return on Equity

High ROE: CGS's Return on Equity (34.7%) is considered high.

Discover strong past performing companies

Financial Health

How is Cogstate's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: CGS's short term assets ($37.2M) exceed its short term liabilities ($15.5M).

Long Term Liabilities: CGS's short term assets ($37.2M) exceed its long term liabilities ($8.5M).

Debt to Equity History and Analysis

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

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

Debt Coverage: CGS's debt is well covered by operating cash flow (541.3%).

Interest Coverage: CGS's interest payments on its debt are well covered by EBIT (187.3x coverage).

Balance Sheet

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Dividend

What is Cogstate 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 CGS's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

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

Growing Dividend: Insufficient data to determine if CGS'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 CGS has not reported any payouts.

Discover strong dividend paying companies

Management

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

1.8yrs

Average management tenure

CEO

Brad O'Connor

16.67yrs

Tenure

US$1,076,087

Compensation

Mr. Bradley O'Connor, also known as Brad, B.Bus, CA, has been the Chief Executive Officer and Managing Director of Cogstate Limited since December 1, 2005 and served as its Chief Financial Officer since Ma...

CEO Compensation Analysis

Compensation vs Market: Brad's total compensation ($USD1.08M) is above average for companies of similar size in the Australian market ($USD564.35K).

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

Leadership Team

Experienced Management: CGS's management team is not considered experienced ( 1.8 years average tenure), which suggests a new team.

Board Members

Experienced Board: CGS's board of directors are not considered experienced ( 1.8 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	2022/08/15 00:00
End of Day Share Price	2022/08/15 00:00
Earnings	2021/12/31
Annual Earnings	2021/06/30