ASX:DN8

Stock Analysis Report

Dreamscape Networks

Executive Summary

Dreamscape Networks Limited provides domain name, hosting, and online services and solutions in Australia, Singapore, the Philippines, the United Arab Emirates, and Ukraine.

Rewards

Trading at 32.4% below its fair value

Earnings are forecast to grow 18.46% per year

Earnings grew by 106.6% over the past year

Risk Analysis

Has a high level of debt

Shareholders have been diluted in the past year

Does not have a meaningful market cap (A$104M)



Snowflake Analysis

Undervalued with solid track record.


Similar Companies

Share Price & News

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


Latest Share Price and Events

Stable Share Price: DN8 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0%

DN8

2.6%

AU IT

0.1%

AU Market


1 Year Return

167.5%

DN8

34.7%

AU IT

19.5%

AU Market

Return vs Industry: DN8 exceeded the Australian IT industry which returned 34.4% over the past year.

Return vs Market: DN8 exceeded the Australian Market which returned 19.4% over the past year.


Shareholder returns

DN8IndustryMarket
7 Day0%2.6%0.1%
30 Day0.9%10.5%4.0%
90 Day1.9%16.9%4.8%
1 Year167.5%167.5%37.2%34.7%24.9%19.5%
3 Yearn/a66.6%53.6%39.7%20.9%
5 Yearn/a143.6%114.0%59.0%23.1%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

32.4%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: DN8 (A$0.27) is trading below our estimate of fair value (A$0.4)

Significantly Below Fair Value: DN8 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: DN8 is good value based on its PE Ratio (18.4x) compared to the IT industry average (21.5x).

PE vs Market: DN8 is good value based on its PE Ratio (18.4x) compared to the Australian market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: DN8 is good value based on its PEG Ratio (1x)


Price to Book Ratio

PB vs Industry: DN8 is overvalued based on its PB Ratio (5.7x) compared to the AU IT industry average (2.7x).


Next Steps

Future Growth

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

18.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: DN8's forecast earnings growth (18.5% per year) is above the savings rate (2.3%).

Earnings vs Market: DN8's earnings (18.5% per year) are forecast to grow faster than the Australian market (9.6% per year).

High Growth Earnings: DN8's earnings are forecast to grow, but not significantly.

Revenue vs Market: DN8's revenue (4.5% per year) is forecast to grow faster than the Australian market (3.8% per year).

High Growth Revenue: DN8's revenue (4.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: DN8's Return on Equity is forecast to be high in 3 years time (27.4%)


Next Steps

Past Performance

How has Dreamscape Networks performed over the past 5 years?

32.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: DN8 has high quality earnings.

Growing Profit Margin: DN8's current net profit margins (7.6%) are higher than last year (4.4%).


Past Earnings Growth Analysis

Earnings Trend: DN8 has become profitable over the past 5 years, growing earnings by 32.1% per year.

Accelerating Growth: DN8's earnings growth over the past year (106.6%) exceeds its 5-year average (32.1% per year).

Earnings vs Industry: DN8 earnings growth over the past year (106.6%) exceeded the IT industry 60.9%.


Return on Equity

High ROE: Whilst DN8's Return on Equity (30.68%) is high, this metric is skewed due to their high level of debt.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Dreamscape Networks's financial position?


Financial Position Analysis

Short Term Liabilities: DN8's short term assets (A$16.8M) do not cover its short term liabilities (A$38.5M).

Long Term Liabilities: DN8's short term assets (A$16.8M) do not cover its long term liabilities (A$34.9M).


Debt to Equity History and Analysis

Debt Level: DN8's debt to equity ratio (113.1%) is considered high.

Reducing Debt: Insufficient data to determine if DN8's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: DN8's debt is well covered by operating cash flow (59.9%).

Interest Coverage: DN8's interest payments on its debt are well covered by EBIT (7x coverage).


Balance Sheet

Inventory Level: DN8 has a low level of unsold assets or inventory.

Debt Coverage by Assets: DN8's debt is not covered by short term assets (assets are 0.8x debt).


Next Steps

Dividend

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


Dividend Yield vs Market

companyn/amarketbottom25%2.3%markettop25%5.5%industryaverage2.3%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate DN8's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate DN8'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 DN8's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if DN8'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 DN8'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 Dreamscape Networks's salary, the management and board of directors tenure and is there insider trading?

3.4yrs

Average management tenure


CEO

Mark Evans 0

3.4yrs

Tenure

AU$1,006,496

Compensation

Mr. Mark Evans has been Chief Executive Officer, Managing Director and Executive Director of Dreamscape Networks Limited since April 27, 2016. Mr. Evans has extensive corporate experience. He served as the ...


CEO Compensation Analysis

Compensation vs Market: Mark's total compensation ($USD692.04K) is above average for companies of similar size in the Australian market ($USD262.68K).

Compensation vs Earnings: Mark's compensation has increased by more than 20% in the past year.


Management Age and Tenure

3.4yrs

Average Tenure

Experienced Management: DN8's management team is considered experienced (3.4 years average tenure).


Board Age and Tenure

3.4yrs

Average Tenure

59yo

Average Age

Experienced Board: DN8'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.


Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 2.2%.


Management Team

  • Tony Sparks (55yo)

    Group Finance Director & Joint Company Secretary

    • Tenure: 3.4yrs
    • Compensation: AU$637.44k
  • Evan Cross (59yo)

    Joint Company Secretary & Non-Executive Director

    • Tenure: 3.4yrs
    • Compensation: AU$273.45k
  • Mark Evans

    CEO, MD & Executive Director

    • Tenure: 3.4yrs
    • Compensation: AU$1.01m
  • Gavin Gibson

    Chief Operating Officer

    • Tenure: 3.4yrs
    • Compensation: AU$669.65k
  • Sharon Sam

    Group Financial Controller

    • Tenure: 1.4yrs
  • Robert Winkelmann

    Chief Marketing Officer

    • Lauren Lever

      Chief Digital Officer


      Board Members

      • Peter James (69yo)

        Non-Executive Chairman

        • Compensation: AU$163.63k
      • Evan Cross (59yo)

        Joint Company Secretary & Non-Executive Director

        • Tenure: 3.4yrs
        • Compensation: AU$273.45k
      • Shin Ein Ng (44yo)

        Independent Non-Executive Director

        • Tenure: 1.4yrs
        • Compensation: AU$77.68k
      • Mark Evans

        CEO, MD & Executive Director

        • Tenure: 3.4yrs
        • Compensation: AU$1.01m

      Company Information

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


      Key Information

      • Name: Dreamscape Networks Limited
      • Ticker: DN8
      • Exchange: ASX
      • Founded: 2016
      • Industry: Internet Services and Infrastructure
      • Sector: Software
      • Market Cap: AU$104.232m
      • Shares outstanding: 389.65m
      • Website: https://www.dreamscapenetworks.com

      Number of Employees


      Location

      • Dreamscape Networks Limited
      • No.09-01, Tai Seng Centre
      • 3 Irving Road
      • Singapore
      • 369522
      • Singapore

      Listings

      TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
      DN8ASX (Australian Securities Exchange)YesShare CapitalAUAUDDec 2016
      DN8CHIA (Chi-X Australia)YesShare CapitalAUAUDDec 2016

      Biography

      Dreamscape Networks Limited provides domain name, hosting, and online services and solutions in Australia, Singapore, the Philippines, the United Arab Emirates, and Ukraine. The company provides Website and email hosting, and domain registration services, as well as operates an email marketing platform under the Newsletter name. It also offers Sitebeat, an intuitive Website builder platform that enables users to create Websites and online stores; and virtual infrastructure services to micro, small, and medium size businesses under the Webcity International name. Dreamscape Networks Limited was incorporated in 2016 and is headquartered in Singapore. 


      Company Analysis and Financial Data Status

      All financial data provided by Standard & Poor's Capital IQ.
      DataLast Updated (UTC time)
      Company Analysis2019/10/31 10:45
      End of Day Share Price2019/10/15 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.