ASX:EML

Stock Analysis Report

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Executive Summary

EML Payments Limited provides prepaid payment services in Australia, Europe, and North America.


Snowflake Analysis

Flawless balance sheet with high growth potential.

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

2.5%

EML

5.0%

AU IT

4.8%

AU Market


1 Year Return

38.9%

EML

21.7%

AU IT

-10.6%

AU Market

Return vs Industry: EML exceeded the Australian IT industry which returned 21.3% over the past year.

Return vs Market: EML exceeded the Australian Market which returned -10.3% over the past year.


Shareholder returns

EMLIndustryMarket
7 Day2.5%5.0%4.8%
30 Day37.4%26.2%5.5%
90 Day4.3%15.8%-10.1%
1 Year40.6%38.9%23.6%21.7%-7.0%-10.6%
3 Year124.0%121.3%41.1%30.5%10.3%-4.3%
5 Year514.2%506.7%120.6%95.6%28.3%0.7%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

93.09x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: EML (A$3.64) is trading above our estimate of fair value (A$3.3)

Significantly Below Fair Value: EML is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: EML is poor value based on its PE Ratio (93.1x) compared to the IT industry average (22.7x).

PE vs Market: EML is poor value based on its PE Ratio (93.1x) compared to the Australian market (15.5x).


Price to Earnings Growth Ratio

PEG Ratio: EML is poor value based on its PEG Ratio (1.7x)


Price to Book Ratio

PB vs Industry: EML is overvalued based on its PB Ratio (3x) compared to the AU IT industry average (1.9x).


Next Steps

Future Growth

How is EML Payments forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

54.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: EML's forecast earnings growth (54.2% per year) is above the savings rate (2.3%).

Earnings vs Market: EML's earnings (54.2% per year) are forecast to grow faster than the Australian market (15% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: EML's revenue (28.3% per year) is forecast to grow faster than the Australian market (4.3% per year).

High Growth Revenue: EML's revenue (28.3% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: EML's Return on Equity is forecast to be low in 3 years time (8.9%).


Next Steps

Past Performance

How has EML Payments performed over the past 5 years?

51.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: EML has a large one-off loss of A$3.8M impacting its December 31 2019 financial results.

Growing Profit Margin: EML's current net profit margins (9.3%) are higher than last year (3.4%).


Past Earnings Growth Analysis

Earnings Trend: EML has become profitable over the past 5 years, growing earnings by 51.9% per year.

Accelerating Growth: EML's earnings growth over the past year (271.7%) exceeds its 5-year average (51.9% per year).

Earnings vs Industry: EML earnings growth over the past year (271.7%) exceeded the IT industry -0.3%.


Return on Equity

High ROE: EML's Return on Equity (2.5%) is considered low.


Next Steps

Financial Health

How is EML Payments's financial position?


Financial Position Analysis

Short Term Liabilities: EML's short term assets (A$736.6M) exceed its short term liabilities (A$475.3M).

Long Term Liabilities: EML's short term assets (A$736.6M) exceed its long term liabilities (A$27.4M).


Debt to Equity History and Analysis

Debt Level: EML is debt free.

Reducing Debt: EML had no debt 5 years ago.

Debt Coverage: EML has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: EML has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet


Next Steps

Dividend

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


Dividend Yield vs Market

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

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

Growing Dividend: Insufficient data to determine if EML'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 EML'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?

1.8yrs

Average management tenure


CEO

Tom Cregan (48yo)

8yrs

Tenure

AU$2,650,796

Compensation

Mr. Thomas Anthony Cregan, also known as Tom, has been the Chief Executive Officer of EML Payments Ltd (formerly, Emerchants Limited) since April 2, 2012 and has been its Managing Director since August 27, ...


CEO Compensation Analysis

Compensation vs Market: Tom's total compensation ($USD1.76M) is above average for companies of similar size in the Australian market ($USD1.01M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Thomas Cregan
Group CEO8yrsAU$2.65m2.97% A$38.8m
Robert Shore
Group Chief Financial Officer1.42yrsAU$570.86k0.024% A$318.6k
Brandon Thompson
Group Chief Commercial Officer1.83yrsAU$1.37m0.097% A$1.3m
Jason Nadler
Group Chief Technology Officer1.33yrsno datano data
Paul Wenk
Group General Counsel & Company Secretary1.75yrsno datano data
Richard Anderson
Chief Sales & Marketing O­fficer0.17yrAU$236.00kno data
Eric Mettemeyer
Chief Corporate Development Officer1.83yrsAU$1.75mno data
Kristen Shaw
Group Chief People & Culture Officer1.75yrsAU$36.12kno data
Andrew Betts
Group Chief Risk & Regulatory Officer6.83yrsAU$503.08kno data
Rachelle Ledger
Chief Executive Officer of Australia3.58yrsAU$488.32kno data

1.8yrs

Average Tenure

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


Board Members

NamePositionTenureCompensationOwnership
Thomas Cregan
Group CEO8yrsAU$2.65m2.97% A$38.8m
George Gresham
Independent Non-Executive Directorno datano datano data
David Liddy
Independent Non-Executive Director8yrsAU$111.26k0.27% A$3.5m
Anthony Adcock
Independent Non-Executive Director8.42yrsAU$111.76k0.0069% A$91.0k
Kirstin Ferguson
Independent Non-Executive Director2.17yrsAU$105.13k0.0051% A$66.6k
Peter Martin
Independent Non-Executive Chairman5.17yrsAU$164.25k2.03% A$26.6m
Melanie Wilson
Independent Non-Executive Director2.17yrsAU$99.00k0.013% A$174.7k

5.2yrs

Average Tenure

50yo

Average Age

Experienced Board: EML's board of directors are considered experienced (5.2 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: EML insiders have sold more shares than they have bought 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 43.7%.


Top Shareholders

Company Information

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


Key Information

  • Name: EML Payments Limited
  • Ticker: EML
  • Exchange: ASX
  • Founded: 2001
  • Industry: Data Processing and Outsourced Services
  • Sector: Software
  • Market Cap: AU$1.309b
  • Shares outstanding: 359.70m
  • Website: https://emlpayments.com

Number of Employees


Location

  • EML Payments Limited
  • 26 Commercial Road
  • Level 2
  • Newstead
  • Queensland
  • 4006
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
EMLASX (Australian Securities Exchange)YesOrdinary SharesAUAUDJan 2006
A8Y1DB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 2006
EMCH.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 2006
EMLCHIA (Chi-X Australia)YesOrdinary SharesAUAUDJan 2006

Biography

EML Payments Limited provides prepaid payment services in Australia, Europe, and North America. The company issues mobile, virtual, and physical card solutions for payouts, gifts, incentives and rewards, and supplier payments. It also offers supplier enablement, payment execution, program management, and other services. The company was formerly known as Emerchants Limited and changed its name to EML Payments Limited in November 2016. EML Payments Limited was founded in 2001 and is headquartered in Newstead, Australia. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/05/31 10:35
End of Day Share Price2020/05/29 00:00
Earnings2019/12/31
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.