ASX:CL1

Stock Analysis Report

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Executive Summary

Class Limited develops and distributes cloud-based accounting, investment reporting, and administration software for accountants, administrators, and advisers in Australia. More Details


Snowflake Analysis

Excellent balance sheet with moderate growth potential.


Similar Companies

Share Price & News

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


Latest Share Price and Events

Stable Share Price: CL1's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

4.8%

CL1

1.1%

AU Software

-0.3%

AU Market


1 Year Return

25.7%

CL1

31.0%

AU Software

-6.9%

AU Market

Return vs Industry: CL1 underperformed the Australian Software industry which returned 31% over the past year.

Return vs Market: CL1 exceeded the Australian Market which returned -6.9% over the past year.


Shareholder returns

CL1IndustryMarket
7 Day4.8%1.1%-0.3%
30 Day7.3%11.6%5.1%
90 Day63.6%22.4%4.2%
1 Year29.3%25.7%32.0%31.0%-3.5%-6.9%
3 Year-18.7%-25.4%122.3%114.7%18.1%3.0%
5 Yearn/a195.5%173.8%44.2%15.1%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

18.1%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: CL1 (A$2.2) is trading below our estimate of fair value (A$2.69)

Significantly Below Fair Value: CL1 is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: CL1 is poor value based on its PE Ratio (38.3x) compared to the AU Software industry average (33.3x).

PE vs Market: CL1 is poor value based on its PE Ratio (38.3x) compared to the Australian market (21.5x).


Price to Earnings Growth Ratio

PEG Ratio: CL1 is poor value based on its PEG Ratio (2.7x)


Price to Book Ratio

PB vs Industry: CL1 is overvalued based on its PB Ratio (6.5x) compared to the AU Software industry average (5.7x).


Next Steps

Future Growth

How is Class forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

14.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CL1's forecast earnings growth (14.2% per year) is above the savings rate (2.3%).

Earnings vs Market: CL1's earnings (14.2% per year) are forecast to grow slower than the Australian market (17.7% per year).

High Growth Earnings: CL1's earnings are forecast to grow, but not significantly.

Revenue vs Market: CL1's revenue (11.3% per year) is forecast to grow faster than the Australian market (4.6% per year).

High Growth Revenue: CL1's revenue (11.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: CL1's Return on Equity is forecast to be high in 3 years time (21.6%)


Next Steps

Past Performance

How has Class performed over the past 5 years?

12.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CL1 has high quality earnings.

Growing Profit Margin: CL1's current net profit margins (15.6%) are lower than last year (23.4%).


Past Earnings Growth Analysis

Earnings Trend: CL1's earnings have grown by 12.4% per year over the past 5 years.

Accelerating Growth: CL1's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: CL1 had negative earnings growth (-23.7%) over the past year, making it difficult to compare to the Software industry average (21%).


Return on Equity

High ROE: CL1's Return on Equity (16.4%) is considered low.


Next Steps

Financial Health

How is Class's financial position?


Financial Position Analysis

Short Term Liabilities: CL1's short term assets (A$21.6M) exceed its short term liabilities (A$9.9M).

Long Term Liabilities: CL1's short term assets (A$21.6M) exceed its long term liabilities (A$12.5M).


Debt to Equity History and Analysis

Debt Level: CL1's debt to equity ratio (24%) is considered satisfactory.

Reducing Debt: Insufficient data to determine if CL1's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: CL1's debt is well covered by operating cash flow (173.6%).

Interest Coverage: CL1's interest payments on its debt are well covered by EBIT (513.2x coverage).


Balance Sheet


Next Steps

Dividend

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

2.27%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: CL1's dividend (2.27%) is higher than the bottom 25% of dividend payers in the Australian market (2.09%).

High Dividend: CL1's dividend (2.27%) is low compared to the top 25% of dividend payers in the Australian market (5.45%).


Stability and Growth of Payments

Stable Dividend: CL1 has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: CL1's dividend payments have increased, but the company has only paid a dividend for 5 years.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (87%), CL1's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: CL1's dividends in 3 years are forecast to be covered by earnings (59.2% payout ratio).


Next Steps

Management

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

1.4yrs

Average management tenure


CEO

Andrew Russell

1.42yrs

Tenure

AU$852,021

Compensation

Mr. Andrew J. Russell serves as Managing Director, Chief Executive Officer and Director of Class Limited since May 14, 2019. He served as a General Manager of Product and Distribution at Mortgage Choice Lt ...


CEO Compensation Analysis

Compensation vs Market: Andrew's total compensation ($USD605.95K) is about average for companies of similar size in the Australian market ($USD505.35K).

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


Leadership Team

NamePositionTenureCompensationOwnership
Andrew Russell
MD, CEO & Director1.42yrsAU$852.02k0.093%
A$ 253.3k
Glenn Day
CFO & Company Secretaryno dataAU$385.33k0.60%
A$ 1.6m
Panos Alexandratos
Chief Operating Officerno datano datano data
Alexis Rouch
Chief Technology Officer0.58yrno datano data
Ebby Carson
Investor Relations Manager & Asst Co. Secretaryno datano datano data
Jacqui Levings
Chief People Officer2.75yrsno datano data
Glenn Poynton
Chief Strategy Officer1.75yrsno datano data
Jason Wilson
Chief Customer Officer0.25yrno datano data

1.4yrs

Average Tenure

Experienced Management: CL1's management team is not considered experienced ( 1.4 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Andrew Russell
MD, CEO & Director1.42yrsAU$852.02k0.093%
A$ 253.3k
Matthew Quinn
Non-Executive Chairman3.67yrsAU$142.35k0.26%
A$ 704.0k
Simon Martin
Independent Non-Executive Director0.92yrno data0.13%
A$ 345.7k
Nicolette Rubinsztein
Independent Non-Executive Director3.5yrsAU$98.55k0.12%
A$ 336.3k
Kathryn Foster
Independent Non-Executive Director5.25yrsAU$98.55k0.067%
A$ 180.9k
Robert Bazzani
Independent Non-Executive Director0.75yrno data0.041%
A$ 110.0k

2.5yrs

Average Tenure

Experienced Board: CL1's board of directors are not considered experienced ( 2.5 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: CL1 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 diluted in the past year, with total shares outstanding growing by 5.1%.


Top Shareholders

Company Information

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


Key Information

  • Name: Class Limited
  • Ticker: CL1
  • Exchange: ASX
  • Founded: 2005
  • Industry: Application Software
  • Sector: Software
  • Market Cap: AU$271.278m
  • Shares outstanding: 123.31m
  • Website: https://www.class.com.au

Number of Employees


Location

  • Class Limited
  • 228 Pitt Street
  • Level 3
  • Sydney
  • New South Wales
  • 2000
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
CL1ASX (Australian Securities Exchange)YesOrdinary SharesAUAUDDec 2015
CL1CHIA (Chi-X Australia)YesOrdinary SharesAUAUDDec 2015
1X6DB (Deutsche Boerse AG)YesOrdinary SharesDEEURDec 2015

Biography

Class Limited develops and distributes cloud-based accounting, investment reporting, and administration software for accountants, administrators, and advisers in Australia. The company offers Class Super, ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/10/25 10:38
End of Day Share Price2020/10/23 00:00
Earnings2020/06/30
Annual Earnings2020/06/30


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.