Neogrid Participações (BOVESPA:NGRD3) - Share price, News & Analysis

NGRD3 fundamental analysis
Snowflake Score
Valuation	2/6
Future Growth	1/6
Past Performance	1/6
Financial Health	6/6
Dividends	0/6

NGRD3 Stock Overview

Neogrid Participações S.A., together with its subsidiaries, develops, licenses, sells, and implements customized software for the management and synchronization of supply chains worldwide.

Rewards

Trading at 55% below our estimate of its fair value

Revenue is forecast to grow 14.02% per year

Risk Analysis

Large one-off items impacting financial results

Profit margins (4.8%) are lower than last year (7.2%)

Does not have a meaningful market cap (R$484M)

Neogrid Participações Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Neogrid Participações
Historical stock prices
Current Share Price	R$2.07
52 Week High	R$7.46
52 Week Low	R$1.98
Beta	0
1 Month Change	-8.00%
3 Month Change	-24.18%
1 Year Change	-65.56%
3 Year Change	n/a
5 Year Change	n/a
Change since IPO	-53.27%

Recent News & Updates

Mar 29

Neogrid Participações' (BVMF:NGRD3) Returns On Capital Not Reflecting Well On The Business

Did you know there are some financial metrics that can provide clues of a potential multi-bagger? One common approach...

Shareholder Returns

	NGRD3	BR Software	BR Market
7D	3.0%	8.8%	-0.8%
1Y	-65.6%	-19.3%	-29.7%

Return vs Industry: NGRD3 underperformed the BR Software industry which returned -19.3% over the past year.

Return vs Market: NGRD3 underperformed the BR Market which returned -29.7% over the past year.

Price Volatility

Is NGRD3's price volatile compared to industry and market?
NGRD3 volatility
NGRD3 Average Weekly Movement	6.3%
Software Industry Average Movement	8.0%
Market Average Movement	5.9%
10% most volatile stocks in BR Market	9.2%
10% least volatile stocks in BR Market	2.8%

Stable Share Price: NGRD3 is not significantly more volatile than the rest of BR stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: NGRD3's weekly volatility (6%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1999	n/a	Jean Klaumann	https://www.neogrid.com

Neogrid Participações S.A., together with its subsidiaries, develops, licenses, sells, and implements customized software for the management and synchronization of supply chains worldwide. The company also provides related technical advisory and training services. In addition, it offers software and databases installation, configuration, maintenance, and technical IT support services.

Neogrid Participações Fundamentals Summary

How do Neogrid Participações's earnings and revenue compare to its market cap?
NGRD3 fundamental statistics
Market Cap	R$483.79m
Earnings (TTM)	R$12.21m
Revenue (TTM)	R$252.17m

39.6x

P/E Ratio

1.9x

P/S Ratio

Is NGRD3 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
NGRD3 income statement (TTM)
Revenue	R$252.17m
Cost of Revenue	R$87.52m
Gross Profit	R$164.65m
Other Expenses	R$152.44m
Earnings	R$12.21m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	0.052
Gross Margin	65.29%
Net Profit Margin	4.84%
Debt/Equity Ratio	16.8%

How did NGRD3 perform over the long term?

See historical performance and comparison

Dividends

0.7%

Current Dividend Yield

29%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is NGRD3 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

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 NGRD3?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for NGRD3. This is calculated by dividing NGRD3's market cap by their current preferred multiple.
What is NGRD3's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	R$483.79m

NGRD3 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	1.1x
Enterprise Value/EBITDA	10.1x
PEG Ratio	n/a

Price to Earnings Ratio vs Peers

How does NGRD3's PE Ratio compare to its peers?

NGRD3 PE Ratio vs Peers

The above table shows the PE ratio for NGRD3 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	25.5x

Forward PE

Price-To-Earnings vs Peers: NGRD3 is expensive based on its Price-To-Earnings Ratio (39.6x) compared to the peer average (25.5x).

Price to Earnings Ratio vs Industry

How does NGRD3's PE Ratio compare vs other companies in the Global Software Industry?

Price-To-Earnings vs Industry: NGRD3 is expensive based on its Price-To-Earnings Ratio (39.6x) compared to the Global Software industry average (30.5x)

Price to Earnings Ratio vs Fair Ratio

What is NGRD3'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.

NGRD3 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	39.6x
Fair PE Ratio	n/a

Price-To-Earnings vs Fair Ratio: Insufficient data to calculate NGRD3's Price-To-Earnings Fair Ratio for valuation analysis.

Share Price vs Fair Value

What is the Fair Price of NGRD3 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: NGRD3 (R$2.07) is trading below our estimate of fair value (R$4.6)

Significantly Below Fair Value: NGRD3 is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate NGRD3's PEG Ratio to determine if it is good value.

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Future Growth

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

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

14.0%

Forecasted annual revenue growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: Insufficient data to determine if NGRD3's forecast earnings growth is above the savings rate (9.1%).

Earnings vs Market: Insufficient data to determine if NGRD3's earnings are forecast to grow faster than the BR market

High Growth Earnings: Insufficient data to determine if NGRD3's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: NGRD3's revenue (14% per year) is forecast to grow faster than the BR market (5.7% per year).

High Growth Revenue: NGRD3's revenue (14% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: Insufficient data to determine if NGRD3's Return on Equity is forecast to be high in 3 years time

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Past Performance

How has Neogrid Participações performed over the past 5 years?

Past Performance Score

1/6

Past Performance Score 1/6

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

17.4%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: NGRD3 has a large one-off loss of R$4.8M impacting its March 31 2022 financial results.

Growing Profit Margin: NGRD3's current net profit margins (4.8%) are lower than last year (7.2%).

Past Earnings Growth Analysis

Earnings Trend: NGRD3 has become profitable over the past 5 years, growing earnings by 17.4% per year.

Accelerating Growth: NGRD3's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: NGRD3 had negative earnings growth (-22.6%) over the past year, making it difficult to compare to the Software industry average (16.3%).

Return on Equity

High ROE: NGRD3's Return on Equity (2.6%) is considered low.

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Financial Health

How is Neogrid Participações'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: NGRD3's short term assets (R$354.4M) exceed its short term liabilities (R$123.1M).

Long Term Liabilities: NGRD3's short term assets (R$354.4M) exceed its long term liabilities (R$158.6M).

Debt to Equity History and Analysis

Debt Level: NGRD3 has more cash than its total debt.

Reducing Debt: NGRD3's debt to equity ratio has reduced from 22.2% to 16.8% over the past 5 years.

Debt Coverage: NGRD3's debt is well covered by operating cash flow (44.7%).

Interest Coverage: NGRD3 earns more interest than it pays, so coverage of interest payments is not a concern.

Balance Sheet

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Dividend

What is Neogrid Participações's 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

0.72%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: NGRD3's dividend (0.72%) isn’t notable compared to the bottom 25% of dividend payers in the BR market (1.72%).

High Dividend: NGRD3's dividend (0.72%) is low compared to the top 25% of dividend payers in the BR market (7.73%).

Stability and Growth of Payments

Stable Dividend: NGRD3 is not paying a notable dividend for the BR market, therefore no need to check if payments are stable.

Growing Dividend: NGRD3 is not paying a notable dividend for the BR market, therefore no need to check if payments are increasing.

Earnings Payout to Shareholders

Earnings Coverage: NGRD3 is not paying a notable dividend for the BR market.

Cash Payout to Shareholders

Cash Flow Coverage: NGRD3 is not paying a notable dividend for the BR market.

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Management

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

0.3yrs

Average management tenure

CEO

Jean Klaumann (46 yo)

0.25

Tenure

Mr. Jean Carlo Klaumann serves as Chief Executive Officer at Neogrid Participações S.A. since March 03, 2022. He has been Vice President of Operations at Linx S.A. since February 28, 2013. Mr. Klaumann ser...

Leadership Team

Experienced Management: NGRD3's management team is not considered experienced ( 0.3 years average tenure), which suggests a new team.

Ownership

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

Insider Trading Volume

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 not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/06/26 00:00
End of Day Share Price	2022/06/24 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31