DB:2XA

Stock Analysis Report

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Executive Summary

AA plc provides roadside assistance, insurance, and driving services in the United Kingdom.


Snowflake Analysis

Undervalued with solid track record.

Share Price & News

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


Latest Share Price and Events

Stable Share Price: 2XA's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-13.4%

2XA

0.4%

DE Consumer Services

-0.6%

DE Market


1 Year Return

-64.3%

2XA

8.9%

DE Consumer Services

3.0%

DE Market

Return vs Industry: 2XA underperformed the German Consumer Services industry which returned 9.2% over the past year.

Return vs Market: 2XA underperformed the German Market which returned 2.5% over the past year.


Shareholder returns

2XAIndustryMarket
7 Day-13.4%0.4%-0.6%
30 Day-24.2%0.9%-0.1%
90 Day21.4%10.9%16.4%
1 Year-64.0%-64.3%10.8%8.9%5.2%3.0%
3 Year-92.2%-92.7%-4.6%-9.4%1.0%-6.9%
5 Year-95.9%-96.4%-45.0%-59.3%8.0%-6.4%

Price Volatility Vs. Market

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


Simply Wall St News

No news available

Valuation

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

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 2XA (€0.19) is trading below our estimate of fair value (€0.66)

Significantly Below Fair Value: 2XA is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 2XA is good value based on its PE Ratio (1.6x) compared to the Consumer Services industry average (15.4x).

PE vs Market: 2XA is good value based on its PE Ratio (1.6x) compared to the German market (20.7x).


Price to Earnings Growth Ratio

PEG Ratio: 2XA is good value based on its PEG Ratio (0.3x)


Price to Book Ratio

PB vs Industry: 2XA has negative assets, so we can't compare its PB Ratio to the XE Consumer Services industry average.


Next Steps

Future Growth

How is AA forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

5.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 2XA's forecast earnings growth (5.9% per year) is above the savings rate (0.2%).

Earnings vs Market: 2XA's earnings (5.9% per year) are forecast to grow slower than the German market (22.5% per year).

High Growth Earnings: 2XA's earnings are forecast to grow, but not significantly.

Revenue vs Market: 2XA's revenue (2.3% per year) is forecast to grow slower than the German market (5.9% per year).

High Growth Revenue: 2XA's revenue (2.3% 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 2XA's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has AA performed over the past 5 years?

16.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 2XA has high quality earnings.

Growing Profit Margin: 2XA's current net profit margins (8.7%) are higher than last year (4.3%).


Past Earnings Growth Analysis

Earnings Trend: 2XA's earnings have grown by 16.1% per year over the past 5 years.

Accelerating Growth: 2XA's earnings growth over the past year (107.1%) exceeds its 5-year average (16.1% per year).

Earnings vs Industry: 2XA earnings growth over the past year (107.1%) exceeded the Consumer Services industry 57.7%.


Return on Equity

High ROE: 2XA's liabilities exceed its assets, so it is difficult to calculate its Return on Equity.


Next Steps

Financial Health

How is AA's financial position?


Financial Position Analysis

Short Term Liabilities: 2XA has negative shareholder equity, which is a more serious situation than short term assets not covering short term liabilities.

Long Term Liabilities: 2XA has negative shareholder equity, which is a more serious situation than short term assets not covering long term liabilities.


Debt to Equity History and Analysis

Debt Level: 2XA has negative shareholder equity, which is a more serious situation than a high debt level.

Reducing Debt: 2XA's has negative shareholder equity, so we do not need to check if its debt has reduced over time.

Debt Coverage: 2XA's debt is not well covered by operating cash flow (11.7%).

Interest Coverage: 2XA's interest payments on its debt are not well covered by EBIT (1.7x coverage).


Balance Sheet


Next Steps

Dividend

What is AA current dividend yield, its reliability and sustainability?

2.52%

Forecast Dividend Yield


Dividend Yield vs Market

Notable Dividend: Unable to evaluate 2XA's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate 2XA'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 2XA's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if 2XA's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: 2XA is not paying a notable dividend for the German market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of 2XA's dividend in 3 years as they are not forecast to pay a notable one for the German market.


Next Steps

Management

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

2.7yrs

Average management tenure


CEO

Simon Breakwell (55yo)

2.92yrs

Tenure

UK£1,611,000

Compensation

Mr. Simon J. Breakwell serves as the Chief Operating Officer of Trove, Inc. Mr. Breakwell has been the Chief Executive Officer of AA plc since September 25, 2017 and served as its Acting Chief Executive s ...


CEO Compensation Analysis

Compensation vs Market: Simon's total compensation ($USD2.03M) is above average for companies of similar size in the German market ($USD781.18K).

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


Leadership Team

NamePositionTenureCompensationOwnership
Simon Breakwell
CEO & Executive Director2.92yrsUK£1.61m0.12% £182.0k
Kevin Dangerfield
CFO & Director0.50yrUK£431.24kno data
Edmund King
President12.5yrsno datano data
Zeeshan Maqbool
Head of Investor Relations & Corporate Financeno datano datano data
Ollie Holden
Chief Information Officer2.67yrsno datano data
Nadia Hoosen
Chief Legal Officer & Company Secretary2yrsno datano data
Janet Connor
Managing Director of Insuranceno datano datano data
Gareth Kirkwood
Managing Director of Roadside Services2.67yrsno datano data
Rob Scott
Financial Controller8.5yrsno datano data

2.7yrs

Average Tenure

55yo

Average Age

Experienced Management: 2XA's management team is considered experienced (2.7 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Simon Breakwell
CEO & Executive Director2.92yrsUK£1.61m0.12% £182.0k
Kevin Dangerfield
CFO & Director0.50yrUK£431.24kno data
Cathryn Riley
Independent Non-Executive Director2.42yrsUK£95.00kno data
Suzi Williams
Independent Non-Executive Director4.75yrsUK£102.00k0.0025% £3.8k
Stephen Barber
Independent Non-Executive Director2.08yrsUK£95.00k0.034% £50.6k
Andrew Blowers
Senior Independent Director2.92yrsUK£137.00k0.011% £16.2k
John Leach
Independent Chairman of the Board2.92yrsUK£275.00k0.015% £22.8k
Mark David Brooker
Independent Non-Executive Director2yrsUK£83.00k0.0032% £4.9k

2.7yrs

Average Tenure

56.5yo

Average Age

Experienced Board: 2XA's board of directors are not considered experienced ( 2.7 years average tenure), which suggests a new board.


Ownership

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


Insider Trading Volume

Insider Buying: 2XA 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

AA plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: AA plc
  • Ticker: 2XA
  • Exchange: DB
  • Founded: 1905
  • Industry: Specialized Consumer Services
  • Sector: Consumer Services
  • Market Cap: UK£135.106m
  • Listing Market Cap: UK£150.834m
  • Shares outstanding: 596.50m
  • Website: https://www.theaa.com

Number of Employees


Location

  • AA plc
  • Fanum House
  • Basing View
  • Basingstoke
  • Hampshire
  • RG21 4EA
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
AA.LSE (London Stock Exchange)YesOrdinary SharesGBGBPJun 2014
2XADB (Deutsche Boerse AG)YesOrdinary SharesDEEURJun 2014
AALBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJun 2014
AATD.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJun 2014

Biography

AA plc provides roadside assistance, insurance, and driving services in the United Kingdom. It operates through two segments, Roadside and Insurance. The company offers breakdowns cover for cars, motorcycles, caravans, vans, and towing; car, motorbike, van, and caravan insurance; and loans, savings, mortgage, travel currency card, insurance, and credit card products. It also provides home, content, building, pet, and holiday home insurance products; and travel services. In addition, the company offers driving advisory services, such as child safety, fuel and environment, legal advisory, service and repair, safety, security, and driving cost and other services; car and MOT services; and financial services, such as personal loans, car loans, home improvement loans, debt consolidation loans, wedding loans, loan management, savings, credit cards, and online security services, as well as reinsurance services. It serves fleet and leasing companies. The company was founded in 1905 and is headquartered in Basingstoke, the United Kingdom. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/07/09 21:48
End of Day Share Price2020/07/09 00:00
Earnings2020/01/31
Annual Earnings2020/01/31


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.