Desktop (BOVESPA:DESK3) - Share price, News & Analysis

DESK3 fundamental analysis
Snowflake Score
Valuation	3/6
Future Growth	5/6
Past Performance	1/6
Financial Health	3/6
Dividends	0/6

DESK3 Stock Overview

Desktop – Sigmanet Comunicação Multimídia S.A.

Rewards

Trading at 69.1% below our estimate of its fair value

Earnings are forecast to grow 40.36% per year

Risk Analysis

Highly volatile share price over the past 3 months

High level of non-cash earnings

Profit margins (6.6%) are lower than last year (16%)

Desktop Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Desktop
Historical stock prices
Current Share Price	R$11.54
52 Week High	R$26.92
52 Week Low	R$11.02
Beta	0
1 Month Change	-25.11%
3 Month Change	-34.47%
1 Year Change	n/a
3 Year Change	n/a
5 Year Change	n/a
Change since IPO	-52.41%

Recent News & Updates

Apr 02

Need To Know: Analysts Are Much More Bullish On Desktop S.A. (BVMF:DESK3)

Shareholders in Desktop S.A. ( BVMF:DESK3 ) may be thrilled to learn that the analysts have just delivered a major...

Shareholder Returns

	DESK3	BR Telecom	BR Market
7D	-0.3%	0.06%	1.1%
1Y	n/a	7.7%	-20.2%

Return vs Industry: Insufficient data to determine how DESK3 performed against the BR Telecom industry.

Return vs Market: Insufficient data to determine how DESK3 performed against the BR Market.

Price Volatility

Is DESK3's price volatile compared to industry and market?
DESK3 volatility
DESK3 Average Weekly Movement	10.3%
Telecom Industry Average Movement	8.7%
Market Average Movement	6.4%
10% most volatile stocks in BR Market	10.0%
10% least volatile stocks in BR Market	3.0%

Stable Share Price: DESK3 is more volatile than 90% of BR stocks over the past 3 months, typically moving +/- 10% a week.

Volatility Over Time: DESK3's weekly volatility (10%) has been stable over the past year, but is still higher than 75% of BR stocks.

About the Company

Founded	Employees	CEO	Website
2006	1,285	Denio Lindo	https://desktop.com.br

Desktop – Sigmanet Comunicação Multimídia S.A. provides internet and telephony connectivity services in Brazil. It offers connection solutions, internet, storage, landline telephony, and digital television. The company was founded in 2006 and is headquartered in Sumaré, Brazil.

Desktop Fundamentals Summary

How do Desktop's earnings and revenue compare to its market cap?
DESK3 fundamental statistics
Market Cap	R$1.01b
Earnings (TTM)	R$29.57m
Revenue (TTM)	R$448.07m

34.0x

P/E Ratio

2.2x

P/S Ratio

Is DESK3 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
DESK3 income statement (TTM)
Revenue	R$448.07m
Cost of Revenue	R$182.28m
Gross Profit	R$265.79m
Other Expenses	R$236.22m
Earnings	R$29.57m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	0.34
Gross Margin	59.32%
Net Profit Margin	6.60%
Debt/Equity Ratio	97.3%

How did DESK3 perform over the long term?

See historical performance and comparison

Dividends

0.1%

Current Dividend Yield

4%

Payout Ratio

Valuation

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

Valuation Score

3/6

Valuation Score 3/6

Below Fair Value
Significantly Below Fair Value
PE vs Industry
PE vs Market
PEG Ratio
PB vs Industry

>50%

Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: DESK3 (R$11.54) is trading below our estimate of fair value (R$37.32)

Significantly Below Fair Value: DESK3 is trading below fair value by more than 20%.

Price To Earnings Ratio

PE vs Industry: DESK3 is poor value based on its PE Ratio (34x) compared to the South American Telecom industry average (21.4x).

PE vs Market: DESK3 is poor value based on its PE Ratio (34x) compared to the BR market (8.9x).

Price to Earnings Growth Ratio

PEG Ratio: DESK3 is good value based on its PEG Ratio (0.8x)

Price to Book Ratio

PB vs Industry: DESK3's PB Ratio (1.1x) is in line with the BR Telecom industry average.

Future Growth

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

Future Growth Score

5/6

Future Growth Score 5/6

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

40.4%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: DESK3's forecast earnings growth (40.4% per year) is above the savings rate (9.1%).

Earnings vs Market: DESK3's earnings (40.4% per year) are forecast to grow faster than the BR market (5.9% per year).

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

Revenue vs Market: DESK3's revenue (24.5% per year) is forecast to grow faster than the BR market (6.2% per year).

High Growth Revenue: DESK3's revenue (24.5% per year) is forecast to grow faster than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: DESK3's Return on Equity is forecast to be low in 3 years time (15.1%).

Past Performance

How has Desktop 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

30.5%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: DESK3 has a high level of non-cash earnings.

Growing Profit Margin: DESK3's current net profit margins (6.6%) are lower than last year (16%).

Past Earnings Growth Analysis

Earnings Trend: DESK3's earnings have grown significantly by 30.5% per year over the past 5 years.

Accelerating Growth: DESK3's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: DESK3 had negative earnings growth (-2.6%) over the past year, making it difficult to compare to the Telecom industry average (288.3%).

Return on Equity

High ROE: DESK3's Return on Equity (3.8%) is considered low.

Financial Health

How is Desktop's financial position?

Financial Health Score

3/6

Financial Health Score 3/6

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

Financial Position Analysis

Short Term Liabilities: DESK3's short term assets (R$626.5M) exceed its short term liabilities (R$591.3M).

Long Term Liabilities: DESK3's short term assets (R$626.5M) do not cover its long term liabilities (R$903.4M).

Debt to Equity History and Analysis

Debt Level: DESK3's net debt to equity ratio (39.7%) is considered satisfactory.

Reducing Debt: Insufficient data to determine if DESK3's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: DESK3's debt is well covered by operating cash flow (85.1%).

Interest Coverage: DESK3's interest payments on its debt are not well covered by EBIT (1.9x coverage).

Balance Sheet

Dividend

What is Desktop 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

0.12%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: DESK3's dividend (0.12%) isn’t notable compared to the bottom 25% of dividend payers in the BR market (1.4%).

High Dividend: DESK3's dividend (0.12%) is low compared to the top 25% of dividend payers in the BR market (6.61%).

Stability and Growth of Payments

Stable Dividend: DESK3 is not paying a notable dividend for the BR market, therefore no need to check if payments are stable.

Growing Dividend: DESK3 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: DESK3 is not paying a notable dividend for the BR market.

Cash Payout to Shareholders

Cash Flow Coverage: DESK3 is paying a dividend but the company has no free cash flows.

Discover strong dividend paying companies

Management

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

1.8yrs

Average management tenure

CEO

Denio Lindo

16.33yrs

Tenure

Mr. Denio Alves Lindo is Chief Executive Officer of Desktop - Sigmanet Comunicacao Multimidia S.A. since 2006 and also serves as its Director. Mr. Lindo was the Chief Executive Officer at Desktop Online/DI...

Leadership Team

Experienced Management: DESK3's management team is not considered experienced ( 1.8 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: DESK3 only recently listed within the past 12 months.

Data	Last Updated (UTC time)
Company Analysis	2022/05/19 00:00
End of Day Share Price	2022/05/19 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31