DB:KS3

Stock Analysis Report

Keywords Studios

Executive Summary

Keywords Studios plc provides technical services to the video game industry in Ireland and internationally.


Snowflake Analysis

Excellent balance sheet with reasonable growth potential.


Similar Companies

Share Price & News

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


Latest Share Price and Events

Stable Share Price: KS3 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0%

KS3

1.7%

DE IT

-2.7%

DE Market


1 Year Return

16.1%

KS3

3.0%

DE IT

-20.4%

DE Market

Return vs Industry: KS3 exceeded the German IT industry which returned 3% over the past year.

Return vs Market: KS3 exceeded the German Market which returned -20.4% over the past year.


Shareholder returns

KS3IndustryMarket
7 Day0%1.7%-2.7%
30 Day-0.5%-10.8%-18.4%
90 Day-2.5%-12.1%-26.7%
1 Year16.2%16.1%3.7%3.0%-18.1%-20.4%
3 Yearn/a79.7%74.2%-19.1%-25.9%
5 Yearn/a164.4%153.0%-19.5%-30.4%

Price Volatility Vs. Market

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


Simply Wall St News

No news available

Valuation

Is Keywords Studios 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: KS3 (€17.34) is trading below our estimate of fair value (€36.58)

Significantly Below Fair Value: KS3 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: KS3 is poor value based on its PE Ratio (96.3x) compared to the IT industry average (26.6x).

PE vs Market: KS3 is poor value based on its PE Ratio (96.3x) compared to the German market (16.2x).


Price to Earnings Growth Ratio

PEG Ratio: KS3 is poor value based on its PEG Ratio (2.8x)


Price to Book Ratio

PB vs Industry: KS3 is overvalued based on its PB Ratio (4.8x) compared to the DE IT industry average (3.2x).


Next Steps

Future Growth

How is Keywords Studios forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

34.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: KS3's forecast earnings growth (34.7% per year) is above the savings rate (-0.4%).

Earnings vs Market: KS3's earnings (34.7% per year) are forecast to grow faster than the German market (14.3% per year).

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

Revenue vs Market: KS3's revenue (10.6% per year) is forecast to grow faster than the German market (4% per year).

High Growth Revenue: KS3's revenue (10.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: KS3's Return on Equity is forecast to be low in 3 years time (16.6%).


Next Steps

Past Performance

How has Keywords Studios performed over the past 5 years?

38.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: KS3 has a large one-off loss of €6.1M impacting its June 30 2019 financial results.

Growing Profit Margin: KS3's current net profit margins (3.5%) are lower than last year (5.8%).


Past Earnings Growth Analysis

Earnings Trend: KS3's earnings have grown significantly by 38% per year over the past 5 years.

Accelerating Growth: KS3's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: KS3 had negative earnings growth (-10.7%) over the past year, making it difficult to compare to the IT industry average (2.5%).


Return on Equity

High ROE: KS3's Return on Equity (5%) is considered low.


Next Steps

Financial Health

How is Keywords Studios's financial position?


Financial Position Analysis

Short Term Liabilities: KS3's short term assets (€118.1M) exceed its short term liabilities (€117.8M).

Long Term Liabilities: KS3's short term assets (€118.1M) exceed its long term liabilities (€23.8M).


Debt to Equity History and Analysis

Debt Level: KS3's debt to equity ratio (22.9%) is considered satisfactory.

Reducing Debt: Insufficient data to determine if KS3's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: KS3's debt is well covered by operating cash flow (75.5%).

Interest Coverage: KS3's interest payments on its debt are well covered by EBIT (22.9x coverage).


Balance Sheet

Inventory Level: KS3 has a low level of unsold assets or inventory.

Debt Coverage by Assets: KS3's debt is covered by short term assets (assets are 2.5x debt).


Next Steps

Dividend

What is Keywords Studios's current dividend yield, its reliability and sustainability?

0.12%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: KS3's dividend (0.12%) isn’t notable compared to the bottom 25% of dividend payers in the German market (1.65%).

High Dividend: KS3's dividend (0.12%) is low compared to the top 25% of dividend payers in the German market (4.86%).


Stability and Growth of Payments

Stable Dividend: KS3 is not paying a notable dividend for the German market, therefore no need to check if payments are stable.

Growing Dividend: KS3 is not paying a notable dividend for the German market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: KS3 is not paying a notable dividend for the German market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of KS3'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?

1.8yrs

Average management tenure


CEO

Andrew Day (55yo)

11s

Tenure

€252,142

Compensation

Mr. Andrew John Day has been the Chief Executive Officer of Keywords Studios plc. since April 2009. Mr. Day has a background in technology, manufacturing and business services through corporate development ...


CEO Compensation Analysis

Compensation vs Market: Andrew's total compensation ($USD275.72K) is below average for companies of similar size in the German market ($USD1.34M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Andrew Day
Group CEO & Executive Director11yrs€252.14k5.1% 50.4m
Jon Hauck
CFO & Executive Director0.50yrno datano data
Giacomo Duranti
Chief Operating Officer13.25yrsno datano data
Andrew Brown
Chief Marketing Officer1.75yrsno datano data
Igor Efremov
Chief Commercial Officer1.75yrsno datano data
Michael Wallen
Head of Global Business Developmentno datano datano data
William O'Donoghue
Company Secretary1.83yrsno datano data
Jamie Campbell
Engineering Service Line Director1.75yrsno datano data
Nicolas Liorzou
Regional Managing Director – Americasno datano datano data
Michael Cartier
Studio Managerno datano datano data

1.8yrs

Average Tenure

45.5yo

Average Age

Experienced Management: KS3's management team is not considered experienced ( 1.8 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Andrew Day
Group CEO & Executive Director11yrs€252.14k5.1% 50.4m
Jon Hauck
CFO & Executive Director0.50yrno datano data
Ross Graham
Independent Non-Executive Chairman6.75yrs€76.29k0.090% 893.7k
David Reeves
Senior Independent Non-Executive Directorno data€68.30k0.050% 495.5k
Georges Fornay
Independent Non-Executive Director2.58yrs€55.30k0.0080% 78.6k
Giorgio Guastalla
Non-Executive Director11.25yrs€50.55kno data
Charlotta Ginman
Independent Non-Executive Director2.58yrs€68.30k0.0027% 26.5k

2.6yrs

Average Tenure

55yo

Average Age

Experienced Board: KS3's board of directors are not considered experienced ( 2.6 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: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 4.4%.


Top Shareholders

Company Information

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


Key Information

  • Name: Keywords Studios plc
  • Ticker: KS3
  • Exchange: DB
  • Founded: 1998
  • Industry: IT Consulting and Other Services
  • Sector: Software
  • Market Cap: UK£871.479m
  • Listing Market Cap: UK£987.984m
  • Shares outstanding: 64.60m
  • Website: https://www.keywordsstudios.com

Number of Employees


Location

  • Keywords Studios plc
  • Keywords Studios
  • South County Business Park
  • Dublin
  • Co. Dublin
  • 18
  • Ireland

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
KWSAIM (London Stock Exchange AIM Market)YesOrdinary SharesGBGBPJul 2013
KYYW.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJul 2013
KS3DB (Deutsche Boerse AG)YesOrdinary SharesDEEURJul 2013

Biography

Keywords Studios plc provides technical services to the video game industry in Ireland and internationally. It offers localization services related to translation and cultural adaptation of in-game text and audio scripts in various game platforms and genres; and localization testing services consisting of testing the linguistic correctness and cultural acceptability of computer games. The company also provides audio/voiceover services, including script translation, actor selection, and talent management through pre-production, audio direction, recording, and post-production, as well as offers music licencing or music soundtracks selling services. In addition, it offers functional testing services related to quality assurance services provided to game producers to ensure game functions; and art creation services relate to the production of graphical art assets for inclusion in the video game, including concept art creation, as well as 2D and 3D art asset production and animation. Further, the company provides player support services related to the live operations support, such as community management, player support, and associated services to producers of games, as well as software engineering services. It serves game companies and publishers. The company was founded in 1998 and is headquartered in Dublin, Ireland. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/02 00:17
End of Day Share Price2020/03/11 00:00
Earnings2019/06/30
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.