ASX:IRE

Stock Analysis Report

Executive Summary

IRESS Limited provides market data, trading, compliance, order management, portfolio and wealth management, mortgages and related tools in Australia, New Zealand, Asia, North America, Europe, South Africa, and the United Kingdom.


Snowflake Analysis

Reasonable growth potential with adequate balance sheet.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

11.6%

IRE

5.6%

AU Software

0.1%

AU Market


1 Year Return

-20.7%

IRE

-11.2%

AU Software

-22.8%

AU Market

Return vs Industry: IRE underperformed the Australian Software industry which returned -11.2% over the past year.

Return vs Market: IRE exceeded the Australian Market which returned -22.8% over the past year.


Shareholder returns

IREIndustryMarket
7 Day11.6%5.6%0.1%
30 Day-12.9%-20.6%-28.8%
90 Day-22.2%-27.5%-30.1%
1 Year-17.5%-20.7%-10.4%-11.2%-19.4%-22.8%
3 Year-0.6%-11.4%80.2%73.1%-9.5%-21.7%
5 Year19.1%-2.0%71.3%60.4%2.1%-20.8%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

16.4%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: IRE (A$10.37) is trading below our estimate of fair value (A$12.41)

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


Price To Earnings Ratio

PE vs Industry: IRE is good value based on its PE Ratio (27.4x) compared to the Software industry average (29x).

PE vs Market: IRE is poor value based on its PE Ratio (27.4x) compared to the Australian market (12.6x).


Price to Earnings Growth Ratio

PEG Ratio: IRE is poor value based on its PEG Ratio (2.5x)


Price to Book Ratio

PB vs Industry: IRE is overvalued based on its PB Ratio (4.1x) compared to the AU Software industry average (2.6x).


Next Steps

Future Growth

How is IRESS forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

11.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: IRE's forecast earnings growth (11% per year) is above the savings rate (1.1%).

Earnings vs Market: IRE's earnings (11% per year) are forecast to grow faster than the Australian market (10% per year).

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

Revenue vs Market: IRE's revenue (6.1% per year) is forecast to grow faster than the Australian market (4.2% per year).

High Growth Revenue: IRE's revenue (6.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: IRE's Return on Equity is forecast to be high in 3 years time (22.1%)


Next Steps

Past Performance

How has IRESS performed over the past 5 years?

4.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: IRE has high quality earnings.

Growing Profit Margin: IRE's current net profit margins (12.8%) are lower than last year (13.8%).


Past Earnings Growth Analysis

Earnings Trend: IRE's earnings have grown by 4.9% per year over the past 5 years.

Accelerating Growth: IRE's earnings growth over the past year (1.6%) is below its 5-year average (4.9% per year).

Earnings vs Industry: IRE earnings growth over the past year (1.6%) underperformed the Software industry 14.1%.


Return on Equity

High ROE: IRE's Return on Equity (15%) is considered low.


Next Steps

Financial Health

How is IRESS's financial position?


Financial Position Analysis

Short Term Liabilities: IRE's short term assets (A$115.3M) exceed its short term liabilities (A$85.6M).

Long Term Liabilities: IRE's short term assets (A$115.3M) do not cover its long term liabilities (A$316.4M).


Debt to Equity History and Analysis

Debt Level: IRE's debt to equity ratio (52.4%) is considered high.

Reducing Debt: IRE's debt to equity ratio has reduced from 58.1% to 52.4% over the past 5 years.

Debt Coverage: IRE's debt is well covered by operating cash flow (46%).

Interest Coverage: IRE's interest payments on its debt are well covered by EBIT (12x coverage).


Balance Sheet

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

Debt Coverage by Assets: IRE's debt is not covered by short term assets (assets are 0.5x debt).


Next Steps

Dividend

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

4.44%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: IRE's dividend (4.44%) is higher than the bottom 25% of dividend payers in the Australian market (3.37%).

High Dividend: IRE's dividend (4.44%) is low compared to the top 25% of dividend payers in the Australian market (8.57%).


Stability and Growth of Payments

Stable Dividend: IRE's dividends per share have been stable in the past 10 years.

Growing Dividend: IRE's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (121.5%), IRE's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: IRE's dividends in 3 years are not forecast to be well covered by earnings (97.2% payout ratio).


Next Steps

Management

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

4.6yrs

Average management tenure


CEO

Andrew Walsh (45yo)

10.42s

Tenure

AU$2,739,012

Compensation

Mr. Andrew Leslie Walsh has been the Managing Director and Chief Executive Officer at IRESS Limited since October 14, 2009 and served as its Chief Technology Officer since November 3, 2016. Mr. Walsh serve ...


CEO Compensation Analysis

Compensation vs Market: Andrew's total compensation ($USD1.68M) is above average for companies of similar size in the Australian market ($USD1.07M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Andrew Walsh
MD, CEO & Director10.42yrsAU$2.74m0.23% A$4.2m
John Harris
Chief Financial Officer4.92yrsAU$1.12m0.014% A$247.5k
Andrew Todd
Chief Technology Officer3.17yrsAU$1.24mno data
Peter Ferguson
Group General Counsel & Company Secretary8.75yrsAU$747.01k0.012% A$224.0k
Julia McNeill
Group Executive of Human Resources6.5yrsAU$810.25k0.0021% A$38.1k
Aaron Knowles
Group Executive of Product4.17yrsAU$1.17m0.0076% A$136.5k
Simon New
Group Executive of Client Solutions4.33yrsAU$1.06m0.0064% A$115.9k
Coran Lill
Group Executive of Communications & Marketing3.17yrsno datano data
Michael Harrison
Managing Director of Sales & Strategic Relationshipsno datano datano data
Kirsty Gross
Manager Director of Australia & New Zealand - Financial Marketsno dataAU$721.74kno data

4.6yrs

Average Tenure

Experienced Management: IRE's management team is considered experienced (4.6 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Andrew Walsh
MD, CEO & Director10.42yrsAU$2.74m0.23% A$4.2m
Geoffrey Tomlinson
Independent Non-Executive Director5.08yrsAU$130.00k0.0046% A$82.9k
Jennifer Seabrook
Independent Non-Executive Director11.58yrsAU$154.00k0.025% A$441.8k
Anthony D'Aloisio
Independent Chairman of the Board5.58yrsAU$240.00k0.028% A$512.4k
John Hayes
Independent Non-Executive Director8.75yrsAU$154.00k0.0080% A$143.0k
John Alexander Cameron
Independent Non-Executive Director10yrsAU$130.00k0.021% A$380.3k
Nicola Beattie
Independent Non-Executive Director5.08yrsAU$142.35k0.0035% A$62.2k
Michael Dwyer
Independent Non-Executive Director0.083yrno datano data
Julie Fahey
Independent Non Executive Director2.42yrsAU$130.00k0.0015% A$26.8k
Trudy Vonhoff
Independent Non-Executive Director0.083yrno data0.0063% A$114.1k

5.3yrs

Average Tenure

62yo

Average Age

Experienced Board: IRE's board of directors are considered experienced (5.3 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: IRE insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

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


Key Information

  • Name: IRESS Limited
  • Ticker: IRE
  • Exchange: ASX
  • Founded: 1993
  • Industry: Application Software
  • Sector: Software
  • Market Cap: AU$1.799b
  • Shares outstanding: 173.48m
  • Website: https://www.iress.com

Number of Employees


Location

  • IRESS Limited
  • 385 Bourke Street
  • Level 16
  • Melbourne
  • Victoria
  • 3000
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
IREASX (Australian Securities Exchange)YesOrdinary SharesAUAUDNov 2000
BRFDB (Deutsche Boerse AG)YesOrdinary SharesDEEURNov 2000
IRECHIA (Chi-X Australia)YesOrdinary SharesAUAUDNov 2000

Biography

IRESS Limited provides market data, trading, compliance, order management, portfolio and wealth management, mortgages and related tools in Australia, New Zealand, Asia, North America, Europe, South Africa, and the United Kingdom. Its software products include trading interfaces, order and execution management, order routing, FIX, portfolio management, securities lending, analytical tools, connectivity services, and client relationship and wealth management products for investment managers and platforms, discretionary retail fund managers, private client adviser, and wealth managers, as well as for institutional sell side, retail, and online brokers. It also offers integrated financial advice software, which includes client management, business automation, portfolio data, research, financial tool planning, scaled advice journeys, digital client solutions, and data driven compliance and analytics for institutional advisory and independent advisory clients. In addition, the company offers superannuation administration software comprises of fund registry, digital member portal, digital advice solutions, and fund administration services; and multi-channel mortgage sales and origination software, such as automated workflow, application processing, mortgage comparison, mortgage advice, and lender connectivity for mortgage lenders and intermediaries. Further, it offers insurance and pension sourcing software, including quoting, comparison, and application processing products. The company was formerly known as IRESS Market Technology Limited and changed its name to IRESS Limited in May 2012. IRESS Limited was founded in 1993 and is based in Melbourne, Australia. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/28 10:35
End of Day Share Price2020/03/27 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


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.