ASX:BRN

Stock Analysis Report

BrainChip Holdings

Executive Summary

BrainChip Holdings Limited develops software and hardware accelerated solutions for artificial intelligence and machine learning applications in North America, Europe, the Middle East, and Asia.

Snowflake

Fundamentals

High growth potential with mediocre balance sheet.

Share Price & News

How has BrainChip Holdings's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

-15.5%

BRN

-5.5%

AU Software

-0.2%

AU Market


1 Year Return

-60.8%

BRN

41.7%

AU Software

10.5%

AU Market

Return vs Industry: BRN underperformed the Australian Software industry which returned 41.7% over the past year.

Return vs Market: BRN underperformed the Australian Market which returned 10.5% over the past year.


Shareholder returns

BRNIndustryMarket
7 Day-15.5%-5.5%-0.2%
30 Day6.5%-6.4%-1.4%
90 Day-21.0%-3.4%-1.0%
1 Year-59.1%-60.8%42.9%41.7%16.9%10.5%
3 Year-79.5%-80.4%130.1%121.0%36.9%18.6%
5 Yearn/a168.6%146.9%50.2%16.2%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is BrainChip Holdings undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: BRN (A$0.05) is trading below our estimate of fair value (A$0.1)

Significantly Below Fair Value: BRN is trading below fair value by more than 20%.


Price To Earnings Ratio

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

PE vs Market: BRN 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 BRN's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: BRN is overvalued based on its PB Ratio (6.9x) compared to the AU Software industry average (4.4x).


Next Steps

Future Growth

How is BrainChip Holdings forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

86.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: BRN is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (2.3%).

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

High Growth Earnings: BRN's loss is forecast to worsen by 0% next year.

Revenue vs Market: BRN's revenue (57.8% per year) is forecast to grow faster than the Australian market (3.6% per year).

High Growth Revenue: BRN's revenue (57.8% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: BRN's Return on Equity is forecast to be low in 3 years time (10.6%).


Next Steps

Past Performance

How has BrainChip Holdings performed over the past 5 years?

1.6%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: BRN is unprofitable, but has reduced losses over the past 5 years at a rate of 1.6% per year.

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

Earnings vs Industry: BRN is unprofitable, making it difficult to compare its past year earnings growth to the Software industry (22.6%).


Return on Equity

High ROE: BRN has a negative Return on Equity (-233.75%), as it is currently unprofitable.


Return on Assets

ROA vs Industry: BRN is currently unprofitable, so its Return on Assets is negative.


Return on Capital Employed

ROCE Improving: BRN is currently unprofitable, so its Return on Capital Employed is negative.


Next Steps

Financial Health

How is BrainChip Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: BRN's short term assets ($6.3M) exceeds its short term liabilities ($2.9M)

Long Term Liabilities: BRN's short term assets (6.3M) exceeds its long term liabilities (346.6K)


Debt to Equity History and Analysis

Debt Level: BRN's debt to equity ratio (38%) is considered satisfactory

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


Balance Sheet

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

Debt Coverage by Assets: BRN's debt is covered by short term assets (assets are 3.141970x debt).


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: BRN has less than a year of cash runway based on its current free cash flow.

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


Next Steps

Dividend

What is BrainChip Holdings's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%2.4%markettop25%5.6%industryaverage1.2%forecastin3Yearsn/a

Current dividend yield vs market & industry


Stability and Growth of Payments

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

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

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

Growing Dividend: Insufficient data to determine if BRN'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 BRN's dividend in 3 years as they are not forecast to pay a notable one for the Australian market.


Next Steps

Management

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

0.8yrs

Average management tenure


CEO

Lou DiNardo (59yo)

3.1yrs

Tenure

US$4,244,534

Compensation

Mr. Louis DiNardo, also known as Lou, BA, has been Chief Executive Officer and President of BrainChip Holdings Limited since September 30, 2016 and its Managing Director. He served as an Executive Chairman ...


CEO Compensation Analysis

Compensation vs. Market: Lou's total compensation ($USD4.24M) is about average for companies of similar size in the Australian market ($USD259.85K).

Compensation vs Earnings: Lou's compensation has increased whilst the company is unprofitable.


Management Age and Tenure

0.8yrs

Average Tenure

55yo

Average Age

Experienced Management: BRN's management team is not considered experienced ( 0.8 years average tenure), which suggests a new team.


Board Age and Tenure

3.4yrs

Average Tenure

61yo

Average Age

Experienced Board: BRN's board of directors are considered experienced (3.4 years average tenure).


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

SellUS$752,44111 Apr 19
Metals X Limited
EntityCompany
Shares11,930,960
Max PriceUS$0.063

Ownership Breakdown


Management Team

  • Lou DiNardo (59yo)

    President

    • Tenure: 3.1yrs
    • Compensation: US$4.24m
  • Roger Levinson (55yo)

    COO and Head Sales & Marketing

    • Tenure: 0.5yrs
  • Peter Van der Made

    Founder & CTO

    • Tenure: 0yrs
    • Compensation: US$319.09k
  • Ken Scarince

    VP of Finance & Controller

    • Tenure: 0.6yrs
  • Ryan Benton (48yo)

    Consultant

    • Tenure: 1.1yrs
    • Compensation: US$520.42k
  • Anil Mankar (63yo)

    Chief Development Officer

    • Tenure: 0yrs
    • Compensation: US$327.43k
  • Kim Clark (50yo)

    Company Secretary

    • Tenure: 0.8yrs

Board Members

  • Manny Hernandez (63yo)

    Non-Executive Director

    • Tenure: 2.3yrs
    • Compensation: US$429.53k
  • Lou DiNardo (59yo)

    President

    • Tenure: 3.1yrs
    • Compensation: US$4.24m
  • Stephe Wilks (56yo)

    Non-Executive Chairman

    • Tenure: 0.7yrs
  • Steve Liebeskind (64yo)

    Non-Executive Director

    • Tenure: 1.4yrs
    • Compensation: US$55.25k
  • Gert Cauwenberghs

    Member of Advisory Board

    • Tenure: 3.9yrs
  • Adam Osseiran

    Non-Executive Director

    • Tenure: 4.1yrs
    • Compensation: US$209.02k
  • Nicholas Spitzer

    Member of Advisory Board

    • Tenure: 4yrs
  • Jeff Krichmar

    Member of Advisory Board

    • Tenure: 4yrs

Company Information

BrainChip Holdings Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: BrainChip Holdings Limited
  • Ticker: BRN
  • Exchange: ASX
  • Founded: 2011
  • Industry: Application Software
  • Sector: Software
  • Market Cap: AU$67.400m
  • Shares outstanding: 1.30b
  • Website: https://www.brainchipinc.com

Number of Employees


Location

  • BrainChip Holdings Limited
  • 225 George Street
  • Level 12
  • Sydney
  • New South Wales
  • 2000
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
BRNASX (Australian Securities Exchange)YesCommon StockAUAUDMay 2015
BRNCHIA (Chi-X Australia)YesCommon StockAUAUDMay 2015
24YDB (Deutsche Boerse AG)YesCommon StockDEEURMay 2015

Biography

BrainChip Holdings Limited develops software and hardware accelerated solutions for artificial intelligence and machine learning applications in North America, Europe, the Middle East, and Asia. It offers  ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/21 10:35
End of Day Share Price2019/10/21 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.