ASX:8CO

Stock Analysis Report

Executive Summary

8common Limited develops and distributes software solutions in Australia, Asia, and North America.

Risk Analysis

Earnings have declined by -31.71% per year over past 5 years

Shareholders have been substantially diluted in the past year

Currently unprofitable and not forecast to become profitable over the next 3 years

Highly volatile share price over past 3 months

+ 2 more risks


Snowflake Analysis

Excellent balance sheet and overvalued.

Share Price & News

How has 8common's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 8CO's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

0%

8CO

2.6%

AU Software

1.5%

AU Market


1 Year Return

105.0%

8CO

41.2%

AU Software

15.6%

AU Market

Return vs Industry: 8CO exceeded the Australian Software industry which returned 41.2% over the past year.

Return vs Market: 8CO exceeded the Australian Market which returned 15.6% over the past year.


Shareholder returns

8COIndustryMarket
7 Day0%2.6%1.5%
30 Day-21.9%5.1%0.4%
90 Day-25.5%10.9%4.1%
1 Year105.0%105.0%42.3%41.2%20.6%15.6%
3 Yearn/a172.7%160.2%37.1%18.7%
5 Year-57.0%-61.0%177.6%156.4%50.9%17.1%

Price Volatility Vs. Market

How volatile is 8common's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is 8common undervalued compared to its fair value and its price relative to the market?

2.09x

Price to Book (PB) ratio


Share Price vs. Fair Value

Below Fair Value: Insufficient data to calculate 8CO's fair value to establish if it is undervalued.

Significantly Below Fair Value: Insufficient data to calculate 8CO's fair value to establish if it is undervalued.


Price To Earnings Ratio

PE vs Industry: 8CO is unprofitable, so we can't compare its PE Ratio to the Software industry average.

PE vs Market: 8CO is unprofitable, so we can't compare its PE Ratio to the Australian market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate 8CO's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: 8CO is good value based on its PB Ratio (2.1x) compared to the AU Software industry average (4.2x).


Next Steps

Future Growth

How is 8common forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

37.0%

Forecasted Software industry annual growth in earnings


In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as 8common has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.


Next Steps

Past Performance

How has 8common performed over the past 5 years?

-31.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 8CO is currently unprofitable.

Growing Profit Margin: 8CO is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: 8CO is unprofitable, and losses have increased over the past 5 years at a rate of -31.7% per year.

Accelerating Growth: Unable to compare 8CO's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: 8CO is unprofitable, making it difficult to compare its past year earnings growth to the Software industry (23.8%).


Return on Equity

High ROE: 8CO has a negative Return on Equity (-22.44%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is 8common's financial position?


Financial Position Analysis

Short Term Liabilities: 8CO's short term assets (A$1.4M) do not cover its short term liabilities (A$1.4M).

Long Term Liabilities: 8CO's short term assets (A$1.4M) exceed its long term liabilities (A$61.0K).


Debt to Equity History and Analysis

Debt Level: 8CO is debt free.

Reducing Debt: 8CO has no debt compared to 5 years ago when its debt to equity ratio was 57.2%.


Balance Sheet

Inventory Level: 8CO has a low level of unsold assets or inventory.

Debt Coverage by Assets: Insufficient data to determine if 8CO's debt is covered by short term assets.


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: 8CO has sufficient cash runway for more than 3 years based on its current free cash flow.

Forecast Cash Runway: 8CO has sufficient cash runway for more than 3 years if free cash flow continues to reduce at historical rates of -33.4% each year


Next Steps

Dividend

What is 8common's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%2.3%markettop25%5.5%industryaverage1.1%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate 8CO's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate 8CO's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if 8CO's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if 8CO's dividend payments have been increasing.


Current Payout to Shareholders

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


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of 8CO's dividend in 3 years as they are not forecast to pay a notable one for the Australian market.


Next Steps

Management

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

1.2yrs

Average management tenure


CEO

Andrew Bond 0

0.4yrs

Tenure

AU$232,053

Compensation

Mr. Andrew Bond has been the Chief Executive Officer at 8common Limited since September 1, 2019 and served as its Chief Operating Officer until September 1, 2019. Mr. Bond joined 8common in August 2015 and ...


CEO Compensation Analysis

Compensation vs Market: Andrew's total compensation ($USD155.90K) is below average for companies of similar size in the Australian market ($USD254.67K).

Compensation vs Earnings: Insufficient data to compare Andrew's compensation with company performance.


Leadership Team

NamePositionTenureCompensationOwnership
Kah Lim
Founder & Executive Chairman4.1yrsAU$150.00k14.5% A$2.2m
Andrew Bond
Chief Executive Officer0.4yrsAU$232.05k0.016% A$2.5k
Zoran Grujic
Chief Financial Officer1.3yrsAU$63.80k1.49% A$223.7k
Rory Koehler
Chief Technology Officer2.9yrsAU$154.46k0.016% A$2.5k
Ben Brockhoff
Chief Operating Officer0.4yrsno datano data
Dean Jagger
Company Secretary1.2yrsno datano data

1.2yrs

Average Tenure

Experienced Management: 8CO's management team is not considered experienced ( 1.2 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Kah Lim
Founder & Executive Chairman4.1yrsAU$150.00k14.5% A$2.2m
Nyap Liou Gan
Non-Independent Non-Executive Director5.9yrsAU$25.00k7.77% A$1.2m
Adrian Bunter
Independent Non-Executive Director5.7yrsAU$25.00k0.036% A$5.4k
John Du Bois
Independent Non Executive Director1.3yrsAU$16.66k0.13% A$19.1k

4.9yrs

Average Tenure

43yo

Average Age

Experienced Board: 8CO's board of directors are considered experienced (4.9 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.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been substantially diluted in the past year, with total shares outstanding growing by 68.1%.


Top Shareholders

Company Information

8common Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: 8common Limited
  • Ticker: 8CO
  • Exchange: ASX
  • Founded: 2014
  • Industry: Application Software
  • Sector: Software
  • Market Cap: AU$14.999m
  • Shares outstanding: 182.92m
  • Website: https://www.8common.com

Location

  • 8common Limited
  • 383 George Street
  • Level 2
  • Sydney
  • New South Wales
  • 2000
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
8CONBASX (Australian Securities Exchange)NPV DFD 21/02/20(EX-OPTION)AUAUDNo data
8COASX (Australian Securities Exchange)YesOrdinary SharesAUAUDAug 2014
8COCHIA (Chi-X Australia)YesOrdinary SharesAUAUDAug 2014

Biography

8common Limited develops and distributes software solutions in Australia, Asia, and North America. It offers Expense8, a travel and expense management software solution that manages and streamlines the end-to-end processing of employee generated expenses; and Perform8, a survey and action planning solution that diagnoses and prioritizes areas for improvement across its business. It serves publically listed companies, global corporations, and local and national governments. 8common Limited was founded in 2014 and is headquartered in Sydney, Australia. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/18 10:44
End of Day Share Price2020/02/11 00:00
Earnings2019/06/30
Annual Earnings2019/06/30


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.