ASX:ESK

Stock Analysis Report

Executive Summary

Etherstack plc engages in the design, development, and deployment of wireless communications software and products for use in transceivers in the United Kingdom, North America, Australia, New Zealand, Japan, and internationally.

Snowflake

Fundamentals

Poor track record with worrying balance sheet.

Share Price & News

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


Latest Share Price and Events


Market Performance


7 Day Return

0%

ESK

-5.7%

AU Software

0.1%

AU Market


1 Year Return

n/a

ESK

42.6%

AU Software

11.9%

AU Market

Return vs Industry: Insufficient data to determine how ESK performed against the Australian Software industry.

Return vs Market: Insufficient data to determine how ESK performed against the Australian Market.


Shareholder returns

ESKIndustryMarket
7 Day0%-5.7%0.1%
30 Day-1.9%-6.0%-1.1%
90 Dayn/a-4.7%-1.4%
1 Yearn/a43.8%42.6%18.5%11.9%
3 Year-5.6%-5.6%125.8%116.7%36.4%18.1%
5 Year44.0%-29.2%165.9%144.1%50.9%16.7%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

1967.02x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: ESK (A$0.26) is trading above our estimate of fair value (A$0.25)

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


Price To Earnings Ratio

PE vs Industry: ESK is poor value based on its PE Ratio (1967x) compared to the Software industry average (34.3x).

PE vs Market: ESK is poor value based on its PE Ratio (1967x) compared to the Australian market (18.5x).


Price to Earnings Growth Ratio

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


Price to Book Ratio

PB vs Industry: ESK has negative assets, so we can't compare its PB Ratio to the AU Software industry average.


Next Steps

Future Growth

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

35.2%

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 Etherstack 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 Etherstack performed over the past 5 years?

34.5%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: ESK has become profitable over the past 5 years, growing earnings by 34.5% per year.

Accelerating Growth: ESK has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: ESK has become profitable in the last year, making it difficult to compare its past year earnings growth to the Software industry (22.6%).


Return on Equity

High ROE: ESK's liabilities exceed its assets, so it is difficult to calculate its Return on Equity.


Return on Assets

ROA vs Industry: ESK's Return on Assets is below or equal to the Software industry average last year.


Return on Capital Employed

ROCE Improving: Unable to calculate Return on Capital Employed as ESK's short term liabilities exceed total assets.


Next Steps

Financial Health

How is Etherstack's financial position?


Financial Position Analysis

Short Term Liabilities: ESK has negative shareholder equity, which is a more serious situation than short term assets not covering short term liabilities.

Long Term Liabilities: ESK has negative shareholder equity, which is a more serious situation than short term assets not covering long term liabilities.


Debt to Equity History and Analysis

Debt Level: ESK has negative shareholder equity, which is a more serious situation than a high debt level.

Reducing Debt: ESK's has negative shareholder equity, so we do not need to check if its debt has reduced over time.

Debt Coverage: ESK's debt is well covered by operating cash flow (94.5%).

Interest Coverage: ESK's interest payments on its debt are not well covered by EBIT (0.2x coverage).


Balance Sheet

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

Debt Coverage by Assets: ESK has negative shareholder equity (liabilities exceed assets) therefore debt is not covered by short term assets.


Next Steps

Dividend

What is Etherstack'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 ESK's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

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

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

7.5yrs

Average board tenure


CEO

David Deacon 0

7.7yrs

Tenure

US$262,132

Compensation

Mr. David Deacon founded Auria Wireless Pty Ltd and serves as its Chief Executive Officer. Mr. Deacon founded Etherstack plc in 2006 and has been its Chief Executive Officer since 2006. He guides growth an ...


CEO Compensation Analysis

Compensation vs. Market: David's total compensation ($USD262.13K) is about average for companies of similar size in the Australian market ($USD260.53K).

Compensation vs Earnings: David's compensation has been consistent with company performance over the past year.


Board Age and Tenure

7.5yrs

Average Tenure

Experienced Board: ESK's board of directors are considered experienced (7.5 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


Management Team

  • Paul Barnes (66yo)

    Company Secretary & Non Executive Director

    • Tenure: 7.7yrs
    • Compensation: US$45.84k
  • David Deacon

    Founder

    • Tenure: 7.7yrs
    • Compensation: US$262.13k
  • David Carter

    Chief Financial Officer

    • Tenure: 8.1yrs

Board Members

  • Peter Francis Stephens (64yo)

    Non-Executive Chairman

    • Tenure: 7.4yrs
    • Compensation: US$34.71k
  • Paul Barnes (66yo)

    Company Secretary & Non Executive Director

    • Tenure: 7.7yrs
    • Compensation: US$45.84k
  • David Deacon

    Founder

    • Tenure: 7.7yrs
    • Compensation: US$262.13k
  • Scott Minehane

    Independent Non-Executive Director

    • Tenure: 7.4yrs
    • Compensation: US$36.85k

Company Information

Etherstack plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Etherstack plc
  • Ticker: ESK
  • Exchange: ASX
  • Founded: 2012
  • Industry: Application Software
  • Sector: Software
  • Market Cap: AU$28.480m
  • Shares outstanding: 111.69m
  • Website: https://www.etherstack.com

Number of Employees


Location

  • Etherstack plc
  • 28 Poland Street
  • 1st Floor
  • London
  • Berkshire
  • W1F 8QN
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ESKASX (Australian Securities Exchange)YesCDI NPVAUAUDSep 2012

Biography

Etherstack plc engages in the design, development, and deployment of wireless communications software and products for use in transceivers in the United Kingdom, North America, Australia, New Zealand, Japa ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/23 10:35
End of Day Share Price2019/10/14 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.