TSX:TSGI

Stock Analysis Report

Executive Summary

The Stars Group Inc. engages in online gaming and betting businesses primarily in Europe, Australia, and the Americas.

Rewards

Trading at 12.5% below its fair value

Earnings are forecast to grow 71.23% per year

Risk Analysis

Interest payments are not well covered by earnings

Shareholders have been substantially diluted in the past year

Highly volatile share price over past 3 months



Snowflake Analysis

Reasonable growth potential and overvalued.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

2.4%

TSGI

0.8%

CA Hospitality

0.1%

CA Market


1 Year Return

50.4%

TSGI

21.1%

CA Hospitality

12.1%

CA Market

Return vs Industry: TSGI exceeded the Canadian Hospitality industry which returned 21.1% over the past year.

Return vs Market: TSGI exceeded the Canadian Market which returned 12.1% over the past year.


Shareholder returns

TSGIIndustryMarket
7 Day2.4%0.8%0.1%
30 Day13.0%8.3%0.2%
90 Day52.5%19.1%0.7%
1 Year50.4%50.4%22.0%21.1%15.9%12.1%
3 Year71.5%71.5%51.5%47.2%16.0%5.4%
5 Year9.3%9.3%29.4%25.3%33.5%13.8%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

12.5%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: TSGI (CA$32.76) is trading below our estimate of fair value (CA$37.46)

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


Price To Earnings Ratio

PE vs Industry: TSGI is unprofitable, so we can't compare its PE Ratio to the Hospitality industry average.

PE vs Market: TSGI is unprofitable, so we can't compare its PE Ratio to the Canadian market.


Price to Earnings Growth Ratio

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


Price to Book Ratio

PB vs Industry: TSGI is overvalued based on its PB Ratio (1.7x) compared to the CA Hospitality industry average (1.6x).


Next Steps

Future Growth

How is Stars Group forecast to perform in the next 1 to 3 years based on estimates from 16 analysts?

71.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TSGI is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (1.4%).

Earnings vs Market: TSGI is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: TSGI's is expected to become profitable in the next 3 years.

Revenue vs Market: TSGI's revenue (7.9% per year) is forecast to grow faster than the Canadian market (5% per year).

High Growth Revenue: TSGI's revenue (7.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: TSGI's Return on Equity is forecast to be low in 3 years time (13.5%).


Next Steps

Past Performance

How has Stars Group performed over the past 5 years?

-13.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: TSGI is currently unprofitable.

Growing Profit Margin: TSGI is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: TSGI is unprofitable, and losses have increased over the past 5 years at a rate of -13.5% per year.

Accelerating Growth: Unable to compare TSGI's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: TSGI is unprofitable, making it difficult to compare its past year earnings growth to the Hospitality industry (-12.7%).


Return on Equity

High ROE: TSGI has a negative Return on Equity (-1.35%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Stars Group's financial position?


Financial Position Analysis

Short Term Liabilities: TSGI's short term assets ($1.0B) do not cover its short term liabilities ($1.1B).

Long Term Liabilities: TSGI's short term assets ($1.0B) do not cover its long term liabilities ($5.7B).


Debt to Equity History and Analysis

Debt Level: TSGI's debt to equity ratio (118.8%) is considered high.

Reducing Debt: TSGI's debt to equity ratio has reduced from 165% to 118.8% over the past 5 years.

Debt Coverage: TSGI's debt is not well covered by operating cash flow (13.2%).

Interest Coverage: TSGI is unprofitable, therefore interest payments are not well covered by earnings.


Balance Sheet

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

Debt Coverage by Assets: TSGI's debt is not covered by short term assets (assets are 0.2x debt).


Next Steps

Dividend

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


Dividend Yield vs Market

companyn/amarketbottom25%2.0%markettop25%5.7%industryaverage2.8%forecastin3Years0%

Current dividend yield vs market & industry

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

High Dividend: Unable to evaluate TSGI's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if TSGI's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if TSGI'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 TSGI's dividend in 3 years as they are not forecast to pay a notable one for the Canadian market.


Next Steps

Management

What is the CEO of Stars Group's salary, the management and board of directors tenure and is there insider trading?

2.3yrs

Average management tenure


CEO

Rafi Ashkenazi (44yo)

3.8yrs

Tenure

US$6,604,000

Compensation

Mr. Rafael Ashkenazi, also known as Rafi, has been the Chief Executive Officer of The Stars Group Inc.(Formerly known as Amaya, Inc.) since November 2016 and served as its Interim Chief Executive Officer f ...


CEO Compensation Analysis

Compensation vs Market: Rafi's total compensation ($USD6.60M) is above average for companies of similar size in the Canadian market ($USD4.10M).

Compensation vs Earnings: Rafi's compensation has increased whilst the company is unprofitable.


Management Age and Tenure

2.3yrs

Average Tenure

49yo

Average Age

Experienced Management: TSGI's management team is considered experienced (2.3 years average tenure).


Board Age and Tenure

1.9yrs

Average Tenure

63yo

Average Age

Experienced Board: TSGI's board of directors are not considered experienced ( 1.9 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellCA$133,93822 May 19
Harlan Goodson
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares5,571
Max PriceCA$24.05

Ownership Breakdown

Dilution of Shares: Shareholders have been substantially diluted in the past year, with total shares outstanding growing by 57.9%.


Management Team

  • Dave Gadhia (56yo)

    Executive Chairman

    • Tenure: 3.5yrs
    • Compensation: US$2.01m
  • Brian Kyle (54yo)

    Chief Financial Officer

    • Tenure: 2.5yrs
    • Compensation: US$1.97m
  • Rafi Ashkenazi (44yo)

    CEO & Director

    • Tenure: 3.8yrs
    • Compensation: US$6.60m
  • Guy Templer (50yo)

    Chief Operating Officer of Stars Interactive Group

    • Tenure: 0yrs
    • Compensation: US$2.26m
  • Robin Chhabra (48yo)

    Chief Corporate Development Officer

    • Tenure: 2.3yrs
    • Compensation: US$2.76m
  • Marlon Goldstein (45yo)

    Executive VP

    • Tenure: 2.3yrs
    • Compensation: US$2.36m
  • Matt Tripp

    Chief Executive Officer of BetEasy

    • Tenure: 0yrs
  • Andy Burton

    Senior Vice President of Global Sports Platform

    • Tenure: 1.2yrs
  • Vaughan Lewis

    Senior Vice President of Communications

    • Tenure: 1.2yrs

Board Members

  • Dave Lazzarato (63yo)

    Independent Director

    • Tenure: 3.5yrs
    • Compensation: US$448.38k
  • Al Hurley (64yo)

    Lead Director

    • Tenure: 1.6yrs
    • Compensation: US$972.31k
  • Eugene Roman (60yo)

    Independent Director

    • Tenure: 0.6yrs
  • Dave Gadhia (56yo)

    Executive Chairman

    • Tenure: 3.5yrs
    • Compensation: US$2.01m
  • Mary Turner (66yo)

    Independent Director

    • Tenure: 2.5yrs
    • Compensation: US$427.55k
  • Harlan Goodson (72yo)

    Independent Director

    • Tenure: 9.6yrs
    • Compensation: US$435.77k
  • John Schappert (48yo)

    Independent Director

    • Tenure: 0.3yrs
  • Rafi Ashkenazi (44yo)

    CEO & Director

    • Tenure: 3.8yrs
    • Compensation: US$6.60m
  • Melvin Zhang (63yo)

    observer member of the board

    • Tenure: 1.9yrs

Company Information

The Stars Group Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: The Stars Group Inc.
  • Ticker: TSGI
  • Exchange: TSX
  • Founded: 2004
  • Industry: Casinos and Gaming
  • Sector: Consumer Services
  • Market Cap: CA$9.430b
  • Shares outstanding: 287.84m
  • Website: https://www.starsgroup.com

Number of Employees


Location

  • The Stars Group Inc.
  • South Tower
  • Suite 3205
  • Toronto
  • Ontario
  • M5J 2J3
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
TSGITSX (The Toronto Stock Exchange)YesCommon SharesCACADJul 2010
0AYDB (Deutsche Boerse AG)YesCommon SharesDEEURJul 2010
TSGNasdaqGS (Nasdaq Global Select)YesCommon SharesUSUSDJul 2010
0VIOLSE (London Stock Exchange)YesCommon SharesGBCADJul 2010

Biography

The Stars Group Inc. engages in online gaming and betting businesses primarily in Europe, Australia, and the Americas. It owns and operates gaming and related interactive entertainment businesses, such as  ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/14 01:04
End of Day Share Price2019/12/13 00:00
Earnings2019/09/30
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.