DB:BW8

Stock Analysis Report

Spirent Communications

Executive Summary

Spirent Communications plc provides solutions to develop devices and equipment and to operate networks worldwide.


Snowflake Analysis

Flawless balance sheet with solid track record and pays a dividend.


Similar Companies

Share Price & News

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


Latest Share Price and Events

Stable Share Price: BW8 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-19.7%

BW8

-12.8%

DE Communications

-9.1%

DE Market


1 Year Return

38.7%

BW8

-18.5%

DE Communications

2.9%

DE Market

Return vs Industry: BW8 exceeded the German Communications industry which returned -18.5% over the past year.

Return vs Market: BW8 exceeded the German Market which returned 2.9% over the past year.


Shareholder returns

BW8IndustryMarket
7 Day-19.7%-12.8%-9.1%
30 Day-10.1%-17.9%-7.2%
90 Day-4.6%-24.1%-6.5%
1 Year42.1%38.7%-18.1%-18.5%6.1%2.9%
3 Year117.9%95.8%-23.8%-24.0%3.5%-5.6%
5 Year140.3%106.0%55.7%55.4%8.0%-6.8%

Price Volatility Vs. Market

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


Simply Wall St News

No news available

Valuation

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

28.26x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: BW8 (€2.72) is trading above our estimate of fair value (€2.38)

Significantly Below Fair Value: BW8 is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: BW8 is poor value based on its PE Ratio (29.6x) compared to the Communications industry average (17.3x).

PE vs Market: BW8 is poor value based on its PE Ratio (29.6x) compared to the German market (19.9x).


Price to Earnings Growth Ratio

PEG Ratio: BW8 is poor value based on its PEG Ratio (3.7x)


Price to Book Ratio

PB vs Industry: BW8 is overvalued based on its PB Ratio (4.9x) compared to the DE Communications industry average (2.8x).


Next Steps

Future Growth

How is Spirent Communications forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

7.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: BW8's forecast earnings growth (7.9% per year) is above the savings rate (-0.4%).

Earnings vs Market: BW8's earnings (7.9% per year) are forecast to grow slower than the German market (13.1% per year).

High Growth Earnings: BW8's earnings are forecast to grow, but not significantly.

Revenue vs Market: BW8's revenue (5.5% per year) is forecast to grow faster than the German market (5.1% per year).

High Growth Revenue: BW8's revenue (5.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: BW8's Return on Equity is forecast to be low in 3 years time (19.5%).


Next Steps

Past Performance

How has Spirent Communications performed over the past 5 years?

22.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: BW8 has high quality earnings.

Growing Profit Margin: BW8's current net profit margins (11.9%) are higher than last year (7.1%).


Past Earnings Growth Analysis

Earnings Trend: BW8's earnings have grown significantly by 22.5% per year over the past 5 years.

Accelerating Growth: BW8's earnings growth over the past year (79.8%) exceeds its 5-year average (22.5% per year).

Earnings vs Industry: BW8 earnings growth over the past year (79.8%) exceeded the Communications industry 31.6%.


Return on Equity

High ROE: BW8's Return on Equity (16.4%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Spirent Communications's financial position?


Financial Position Analysis

Short Term Liabilities: BW8's short term assets ($278.4M) exceed its short term liabilities ($134.1M).

Long Term Liabilities: BW8's short term assets ($278.4M) exceed its long term liabilities ($48.6M).


Debt to Equity History and Analysis

Debt Level: BW8 is debt free.

Reducing Debt: BW8 has not had any debt for past 5 years.

Debt Coverage: BW8 has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: BW8 has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: BW8 has a low level of unsold assets or inventory.

Debt Coverage by Assets: Insufficient data to determine if BW8's debt is covered by short term assets.


Next Steps

Dividend

What is Spirent Communications's current dividend yield, its reliability and sustainability?

1.67%

Current Dividend Yield


Dividend Yield vs Market

company1.7%marketbottom25%1.5%markettop25%3.9%industryaverage2.1%forecastin3Years2.3%

Current dividend yield vs market & industry

Notable Dividend: BW8's dividend (1.6%) is higher than the bottom 25% of dividend payers in the German market (1.52%).

High Dividend: BW8's dividend (1.6%) is low compared to the top 25% of dividend payers in the German market (3.92%).


Stability and Growth of Payments

Stable Dividend: BW8's dividend payments have been volatile in the past 10 years.

Growing Dividend: BW8's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (49.2%), BW8's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: BW8's dividends in 3 years are forecast to be well covered by earnings (45.6% payout ratio).


Next Steps

Management

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

4.4yrs

Average management tenure


CEO

Eric Updyke 0

0.8yrs

Tenure

0

Mr. Eric Updyke has been Chief Executive Officer and Director at Spirent Communications plc since May 1, 2019. He served on the Executive Management team of Amdocs reporting directly to the CEO. Mr. Updyke ...


Leadership Team

NamePositionTenureCompensationOwnership
Paula Bell
CFO & Executive Director3.4yrsUS$970.60k0.060% $891.3k
Eric Updyke
CEO & Director0.8yrsno datano data
Angus Iveson
Company Secretary & General Counsel5.3yrsno data0.0069% $102.4k
R. Chenhall
Managing Director of PG Drives Technology26.1yrsno datano data
Nigel Wright
Executive Vice President of Global Sales0yrsno data0.0025% $37.4k
Michelle Balch
Deputy Company Secretary0yrsno datano data

4.4yrs

Average Tenure

Experienced Management: BW8's management team is considered experienced (4.4 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Paula Bell
CFO & Executive Director3.4yrsUS$970.60k0.060% $891.3k
Eric Updyke
CEO & Director0.8yrsno datano data
Edgar Masri
Independent Non-Executive Director2.1yrsUS$48.70k0.0033% $48.8k
Jonathan Silver
Senior Independent Non-Executive Director3.3yrsUS$61.00k0.011% $170.6k
Gary Bullard
Independent Non-Executive Director3.2yrsUS$59.00k0.0084% $124.8k
Wendy Koh
Independent Non-Executive Director2.1yrsUS$48.70kno data
William Gennydd Thomas
Non-Executive Chairman2.8yrsUS$160.00k0.011% $164.4k

2.8yrs

Average Tenure

62yo

Average Age

Experienced Board: BW8's board of directors are not considered experienced ( 2.8 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 not been meaningfully diluted in the past year.


Top Shareholders

Company Information

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


Key Information

  • Name: Spirent Communications plc
  • Ticker: BW8
  • Exchange: DB
  • Founded: 1936
  • Industry: Communications Equipment
  • Sector: Tech
  • Market Cap: UK£1.282b
  • Listing Market Cap: UK£1.489b
  • Shares outstanding: 610.64m
  • Website: https://corporate.spirent.com

Number of Employees


Location

  • Spirent Communications plc
  • Northwood Park
  • Gatwick Road
  • Crawley
  • West Sussex
  • RH10 9XN
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SPNU.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1980
SPTLSE (London Stock Exchange)YesOrdinary SharesGBGBPJan 1980
BW8DB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1980
SPTLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJan 1980
SPMY.YOTCPK (Pink Sheets LLC)SPONS ADR NEWUSUSDJul 2001

Biography

Spirent Communications plc provides solutions to develop devices and equipment and to operate networks worldwide. The company operates through Networks & Security, Lifecycle Service Assurance, and Connected Devices segments. The Networks & Security segment develops performance and security test systems to accelerate the development of new devices, networks, and applications for high-speed Ethernet/IP, mobile, and global satellite navigation systems. The Lifecycle Service Assurance segment provides assurance systems to accelerate the turn up of new services, troubleshooting of customer, and network performance problems. The Connected Devices segment develops systems for testing functionality and measuring performance of 4G LTE and 3G mobile devices and services. It serves communication, government, financial services, healthcare, retail, and transportation businesses. The company was formerly known as Spirent plc and changed its name to Spirent Communications plc in May 2006. Spirent Communications plc was founded in 1936 and is headquartered in Crawley, the United Kingdom. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/28 22:21
End of Day Share Price2020/02/28 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.