Ava Risk Group (ASX:AVA) - Share price, News & Analysis

Q: What is the Fair Price of AVA when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

AVA (A$0.19) is trading below our estimate of [[fair value]] (A$0.28)

AVA fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	1/6
Past Performance	2/6
Financial Health	6/6
Dividends	0/6

AVA Stock Overview

Ava Risk Group Limited provides risk management services and technologies worldwide.

Rewards

Trading at 34.1% below our estimate of its fair value

Earnings are forecast to grow 4.82% per year

Risk Analysis

Profit margins (9.1%) are lower than last year (27.3%)

Does not have a meaningful market cap (A$45M)

Ava Risk Group Competitors

Smart Parking

ASX:SPZ

AU$61.3m

Rubicon Water

ASX:RWL

AU$179.9m

DTI Group

ASX:DTI

AU$5.4m

Codan

ASX:CDA

AU$1.3b

Price History & Performance

Summary of all time highs, changes and price drops for Ava Risk Group
Historical stock prices
Current Share Price	AU$0.18
52 Week High	AU$0.55
52 Week Low	AU$0.14
Beta	-0.19
1 Month Change	0%
3 Month Change	-36.21%
1 Year Change	-55.42%
3 Year Change	15.63%
5 Year Change	23.33%
Change since IPO	-77.71%

Recent News & Updates

Mar 03

Ava Risk Group Limited's (ASX:AVA) 34% Dip In Price Shows Sentiment Is Matching Earnings

Ava Risk Group Limited ( ASX:AVA ) shareholders that were waiting for something to happen have been dealt a blow with a...

Shareholder Returns

	AVA	AU Electronic	AU Market
7D	-7.5%	-1.0%	-0.5%
1Y	-55.4%	-31.7%	-12.2%

Return vs Industry: AVA underperformed the Australian Electronic industry which returned -31.7% over the past year.

Return vs Market: AVA underperformed the Australian Market which returned -12.2% over the past year.

Price Volatility

Is AVA's price volatile compared to industry and market?
AVA volatility
AVA Average Weekly Movement	10.0%
Electronic Industry Average Movement	10.0%
Market Average Movement	9.9%
10% most volatile stocks in AU Market	16.6%
10% least volatile stocks in AU Market	4.4%

Stable Share Price: AVA is not significantly more volatile than the rest of Australian stocks over the past 3 months, typically moving +/- 10% a week.

Volatility Over Time: AVA's weekly volatility (10%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1994	n/a	Rob Broomfield	https://www.theavagroup.com

Ava Risk Group Limited provides risk management services and technologies worldwide. It operates through Perimeter Security, Access Control Solutions, and International Valuable Logistics segments. The company manufactures and sells fiber optic intrusion detection and location systems that are used to detect and locate perimeter intrusion; and for data network tapping and tampering, and oil and gas pipeline third party interference detection, as well as other applications, including health, safety, and traffic monitoring.

Ava Risk Group Fundamentals Summary

How do Ava Risk Group's earnings and revenue compare to its market cap?
AVA fundamental statistics
Market Cap	AU$44.95m
Earnings (TTM)	AU$5.24m
Revenue (TTM)	AU$57.37m

8.6x

P/E Ratio

0.8x

P/S Ratio

Is AVA overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
AVA income statement (TTM)
Revenue	AU$57.37m
Cost of Revenue	AU$33.66m
Gross Profit	AU$23.72m
Other Expenses	AU$18.48m
Earnings	AU$5.24m

Last Reported Earnings

Dec 31, 2021

Next Earnings Date

n/a

Earnings per share (EPS)	0.022
Gross Margin	41.34%
Net Profit Margin	9.13%
Debt/Equity Ratio	0%

How did AVA perform over the long term?

See historical performance and comparison

We’ve recently updated our valuation analysis.

Valuation

Is AVA undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for AVA?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for AVA. This is calculated by dividing AVA's market cap by their current preferred multiple.
What is AVA's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	AU$44.95m

AVA key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	n/a
Enterprise Value/EBITDA	n/a
PEG Ratio	1.8x

Price to Earnings Ratio vs Peers

How does AVA's PE Ratio compare to its peers?

AVA PE Ratio vs Peers

The above table shows the PE ratio for AVA vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	30x
SPZ Smart Parking	20.8x	n/a	AU$61.3m
RWL Rubicon Water	48.7x	n/a	AU$179.9m
DTI DTI Group	37.5x	n/a	AU$5.4m
CDA Codan	12.8x	5.8%	AU$1.3b
AVA Ava Risk Group	8.6x	4.8%	AU$44.9m

Forward PE

Price-To-Earnings vs Peers: AVA is good value based on its Price-To-Earnings Ratio (8.6x) compared to the peer average (30x).

Price to Earnings Ratio vs Industry

How does AVA's PE Ratio compare vs other companies in the Global Electronic Industry?

Price-To-Earnings vs Industry: AVA is good value based on its Price-To-Earnings Ratio (8.6x) compared to the Global Electronic industry average (16.9x)

Price to Earnings Ratio vs Fair Ratio

What is AVA's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

AVA PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	8.6x
Fair PE Ratio	16.4x

Price-To-Earnings vs Fair Ratio: AVA is good value based on its Price-To-Earnings Ratio (8.6x) compared to the estimated Fair Price-To-Earnings Ratio (16.4x).

Share Price vs Fair Value

What is the Fair Price of AVA when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: AVA (A$0.19) is trading below our estimate of fair value (A$0.28)

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

Price to Earnings Growth Ratio

PEG Ratio: AVA is poor value based on its PEG Ratio (1.8x)

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Future Growth

How is Ava Risk Group forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

Future Growth Score

1/6

Future Growth Score 1/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

4.8%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: AVA's forecast earnings growth (4.8% per year) is above the savings rate (1.8%).

Earnings vs Market: AVA's earnings (4.8% per year) are forecast to grow slower than the Australian market (5.6% per year).

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

Revenue vs Market: AVA's revenue is expected to decline over the next 3 years (-45.6% per year).

High Growth Revenue: AVA's revenue is forecast to decline over the next 3 years (-45.6% per year).

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: Insufficient data to determine if AVA's Return on Equity is forecast to be high in 3 years time

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Past Performance

How has Ava Risk Group performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

66.5%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: AVA has high quality earnings.

Growing Profit Margin: AVA's current net profit margins (9.1%) are lower than last year (27.3%).

Past Earnings Growth Analysis

Earnings Trend: AVA has become profitable over the past 5 years, growing earnings by 66.5% per year.

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

Earnings vs Industry: AVA had negative earnings growth (-54.7%) over the past year, making it difficult to compare to the Electronic industry average (-39.5%).

Return on Equity

High ROE: AVA's Return on Equity (8.1%) is considered low.

Discover strong past performing companies

Financial Health

How is Ava Risk Group's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: AVA's short term assets (A$63.1M) exceed its short term liabilities (A$4.5M).

Long Term Liabilities: AVA's short term assets (A$63.1M) exceed its long term liabilities (A$414.0K).

Debt to Equity History and Analysis

Debt Level: AVA is debt free.

Reducing Debt: AVA has not had any debt for past 5 years.

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

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

Balance Sheet

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Dividend

What is Ava Risk Group current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

4.86%

Forecast Dividend Yield

Dividend Yield vs Market

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

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

Growing Dividend: Insufficient data to determine if AVA's dividend payments have been increasing.

Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as AVA has not reported any payouts.

Discover strong dividend paying companies

Management

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

4.3yrs

Average management tenure

CEO

Rob Broomfield

2yrs

Tenure

AU$313,228

Compensation

Mr. Robert Broomfield, also known as Rob, serves as Group Chief Executive Officer at Ava Risk Group Limited since July 10, 2020 and serves as its Executive Director since February 27, 2008 and was its Chie...

CEO Compensation Analysis

Compensation vs Market: Rob's total compensation ($USD212.62K) is about average for companies of similar size in the Australian market ($USD281.90K).

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

Leadership Team

Experienced Management: AVA's management team is considered experienced (4.3 years average tenure).

Board Members

Experienced Board: AVA's board of directors are considered experienced (5.8 years average tenure).

Ownership

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

Insider Trading Volume

Insider Buying: AVA 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.

Data	Last Updated (UTC time)
Company Analysis	2022/07/03 00:00
End of Day Share Price	2022/07/01 00:00
Earnings	2021/12/31
Annual Earnings	2021/06/30