Netcompany Group (CPSE:NETC) - Share price, News & Analysis

NETC fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	5/6
Past Performance	3/6
Financial Health	4/6
Dividends	0/6

NETC Stock Overview

Rewards

Trading at 30.6% below our estimate of its fair value

Earnings are forecast to grow 26.9% per year

Earnings grew by 19% over the past year

Risk Analysis

Debt is not well covered by operating cash flow

Netcompany Group Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Netcompany Group
Historical stock prices
Current Share Price	kr.389.20
52 Week High	kr.861.50
52 Week Low	kr.338.00
Beta	0.75
1 Month Change	-2.55%
3 Month Change	-12.03%
1 Year Change	-44.76%
3 Year Change	47.20%
5 Year Change	n/a
Change since IPO	93.63%

Recent News & Updates

Jun 16

Netcompany Group A/S' (CPH:NETC) Intrinsic Value Is Potentially 50% Above Its Share Price

Does the June share price for Netcompany Group A/S ( CPH:NETC ) reflect what it's really worth? Today, we will estimate...

Jun 01

Netcompany Group (CPH:NETC) Is Looking To Continue Growing Its Returns On Capital

If you're looking for a multi-bagger, there's a few things to keep an eye out for. Typically, we'll want to notice a...

Shareholder Returns

	NETC	DK Software	DK Market
7D	5.9%	6.6%	4.8%
1Y	-44.8%	-39.7%	-1.2%

Return vs Industry: NETC underperformed the Danish Software industry which returned -41.3% over the past year.

Return vs Market: NETC underperformed the Danish Market which returned -4% over the past year.

Price Volatility

Is NETC's price volatile compared to industry and market?
NETC volatility
NETC Average Weekly Movement	7.1%
Software Industry Average Movement	9.0%
Market Average Movement	6.5%
10% most volatile stocks in DK Market	10.9%
10% least volatile stocks in DK Market	3.5%

Stable Share Price: NETC is not significantly more volatile than the rest of Danish stocks over the past 3 months, typically moving +/- 7% a week.

Volatility Over Time: NETC's weekly volatility (7%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2000	6,513	Andre Rogaczewski	https://www.netcompany.com

Netcompany Group A/S, an IT services company, delivers business critical IT solutions to public and private sector customers in Denmark, Norway, the United Kingdom, the Netherlands, Belgium, Luxembourg, Greece, Spain, and internationally. It is involved in the development, maintenance, and operation of business-critical IT solutions for various areas, such as digital Web and self-service solutions, application development, cognitive computing, e-commerce and product information management (PIM), ERP, CRM and marketing, application management, case and document management, operation and infrastructure, data and insight, application and mobile, and organizational implementation. The company serves customers in finance, government, manufacturing and engineering, municipality, organization, region, retail and trade, service, unemployment insurance fund and union, telecommunication and media, and energy and utility markets.

Netcompany Group Fundamentals Summary

How do Netcompany Group's earnings and revenue compare to its market cap?
NETC fundamental statistics
Market Cap	kr.19.12b
Earnings (TTM)	kr.510.00m
Revenue (TTM)	kr.4.15b

37.5x

P/E Ratio

4.6x

P/S Ratio

Is NETC overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
NETC income statement (TTM)
Revenue	kr.4.15b
Cost of Revenue	kr.2.72b
Gross Profit	kr.1.42b
Other Expenses	kr.914.91m
Earnings	kr.510.00m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

Aug 11, 2022

Earnings per share (EPS)	10.38
Gross Margin	34.35%
Net Profit Margin	12.29%
Debt/Equity Ratio	71.4%

How did NETC perform over the long term?

See historical performance and comparison

We’ve recently updated our valuation analysis.

Valuation

Is NETC undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for NETC?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for NETC. This is calculated by dividing NETC's market cap by their current preferred multiple.
What is NETC's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	kr.19.12b

NETC key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	5.1x
Enterprise Value/EBITDA	24.9x
PEG Ratio	1.4x

Price to Earnings Ratio vs Peers

How does NETC's PE Ratio compare to its peers?

NETC PE Ratio vs Peers

The above table shows the PE ratio for NETC vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	78.2x

Forward PE

Price-To-Earnings vs Peers: NETC is good value based on its Price-To-Earnings Ratio (37.5x) compared to the peer average (78.2x).

Price to Earnings Ratio vs Industry

How does NETC's PE Ratio compare vs other companies in the Software Industry?

Price-To-Earnings vs Industry: NETC is good value based on its Price-To-Earnings Ratio (37.5x) compared to the Danish Software industry average (109.9x)

Price to Earnings Ratio vs Fair Ratio

What is NETC's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

NETC PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	37.5x
Fair PE Ratio	32.2x

Price-To-Earnings vs Fair Ratio: NETC is expensive based on its Price-To-Earnings Ratio (37.5x) compared to the estimated Fair Price-To-Earnings Ratio (32.2x).

Share Price vs Fair Value

What is the Fair Price of NETC when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: NETC (DKK389.2) is trading below our estimate of fair value (DKK560.68)

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

Price to Earnings Growth Ratio

PEG Ratio: NETC is poor value based on its PEG Ratio (1.4x)

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Future Growth

How is Netcompany Group forecast to perform in the next 1 to 3 years based on estimates from 7 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

26.9%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: NETC's forecast earnings growth (26.9% per year) is above the savings rate (0.09%).

Earnings vs Market: NETC's earnings (26.9% per year) are forecast to grow faster than the Danish market (9.7% per year).

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

Revenue vs Market: NETC's revenue (17% per year) is forecast to grow faster than the Danish market (6.5% per year).

High Growth Revenue: NETC's revenue (17% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: NETC's Return on Equity is forecast to be high in 3 years time (22.8%)

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Past Performance

How has Netcompany Group performed over the past 5 years?

Past Performance Score

3/6

Past Performance Score 3/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

29.4%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: NETC has high quality earnings.

Growing Profit Margin: NETC's current net profit margins (12.3%) are lower than last year (14.3%).

Past Earnings Growth Analysis

Earnings Trend: NETC's earnings have grown significantly by 29.4% per year over the past 5 years.

Accelerating Growth: NETC's earnings growth over the past year (19%) is below its 5-year average (29.4% per year).

Earnings vs Industry: NETC earnings growth over the past year (19%) exceeded the Software industry 16.5%.

Return on Equity

High ROE: NETC's Return on Equity (16.2%) is considered low.

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Financial Health

How is Netcompany Group's financial position?

Financial Health Score

4/6

Financial Health Score 4/6

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

Financial Position Analysis

Short Term Liabilities: NETC's short term assets (DKK2.7B) exceed its short term liabilities (DKK1.4B).

Long Term Liabilities: NETC's short term assets (DKK2.7B) exceed its long term liabilities (DKK2.5B).

Debt to Equity History and Analysis

Debt Level: NETC's net debt to equity ratio (61.1%) is considered high.

Reducing Debt: NETC's debt to equity ratio has reduced from 92.1% to 71.4% over the past 5 years.

Debt Coverage: NETC's debt is not well covered by operating cash flow (18.6%).

Interest Coverage: NETC's interest payments on its debt are well covered by EBIT (31.7x coverage).

Balance Sheet

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Dividend

What is Netcompany Group 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

0.88%

Forecast Dividend Yield

Dividend Yield vs Market

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

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

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

Earnings Payout to Shareholders

Earnings Coverage: NETC is not paying a notable dividend for the Danish market.

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as NETC has not reported any payouts.

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Management

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

5.4yrs

Average management tenure

CEO

Andre Rogaczewski (53 yo)

22.42yrs

Tenure

kr.11,537,000

Compensation

Mr. Andre Rogaczewski has been an Independent Director of Spar Nord Bank A/S since April 7, 2021. Mr. Rogaczewski is the Co-Founder of Netcompany Group A/S in 2000 and serves as its Chief Executive Officer...

CEO Compensation Analysis

Compensation vs Market: Andre's total compensation ($USD1.64M) is about average for companies of similar size in the Danish market ($USD2.06M).

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

Leadership Team

Experienced Management: NETC's management team is seasoned and experienced (5.4 years average tenure).

Board Members

Experienced Board: NETC'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.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/06/24 00:00
End of Day Share Price	2022/06/24 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31