Avation (LSE:AVAP) - Share price, News & Analysis

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

AVAP (£0.8) is trading above our estimate of [[fair value]] (£0.53)

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

AVAP Stock Overview

Avation PLC, together with its subsidiaries, leases commercial passenger aircraft to airlines worldwide.

Rewards

Earnings are forecast to grow 122.95% per year

Risk Analysis

Interest payments are not well covered by earnings

Does not have a meaningful market cap (£56M)

Avation Competitors

Flowtech Fluidpower

AIM:FLO

UK£74.3m

Doric Nimrod Air Three

LSE:DNA3

UK£104.5m

HSS Hire Group

AIM:HSS

UK£101.2m

Braime Group

AIM:BMT

UK£26.4m

Price History & Performance

Summary of all time highs, changes and price drops for Avation
Historical stock prices
Current Share Price	UK£0.80
52 Week High	UK£1.13
52 Week Low	UK£0.61
Beta	1.4
1 Month Change	5.96%
3 Month Change	20.30%
1 Year Change	-8.05%
3 Year Change	-71.43%
5 Year Change	-65.37%
Change since IPO	171.19%

Recent News & Updates

Aug 09

Investors Met With Slowing Returns on Capital At Avation (LON:AVAP)

There are a few key trends to look for if we want to identify the next multi-bagger. In a perfect world, we'd like to...

Shareholder Returns

	AVAP	GB Trade Distributors	GB Market
7D	2.6%	1.1%	0.4%
1Y	-8.0%	-9.9%	-9.0%

Return vs Industry: AVAP exceeded the UK Trade Distributors industry which returned -9.9% over the past year.

Return vs Market: AVAP matched the UK Market which returned -9% over the past year.

Price Volatility

Is AVAP's price volatile compared to industry and market?
AVAP volatility
AVAP Average Weekly Movement	6.5%
Trade Distributors Industry Average Movement	4.8%
Market Average Movement	5.4%
10% most volatile stocks in GB Market	10.8%
10% least volatile stocks in GB Market	2.7%

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

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

About the Company

Founded	Employees	CEO	Website
2006	23	n/a	https://www.avation.net

Avation PLC, together with its subsidiaries, leases commercial passenger aircraft to airlines worldwide. As of June 30, 2021, the company owned and managed a fleet of 44 aircraft. It is also involved in the financing business.

Avation Fundamentals Summary

How do Avation's earnings and revenue compare to its market cap?
AVAP fundamental statistics
Market Cap	US$67.30m
Earnings (TTM)	-US$38.82m
Revenue (TTM)	US$114.30m

0.6x

P/S Ratio

-1.7x

P/E Ratio

Is AVAP overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
AVAP income statement (TTM)
Revenue	US$114.30m
Cost of Revenue	US$2.83m
Gross Profit	US$111.47m
Other Expenses	US$150.29m
Earnings	-US$38.82m

Last Reported Earnings

Dec 31, 2021

Next Earnings Date

Oct 06, 2022

Earnings per share (EPS)	-0.56
Gross Margin	97.52%
Net Profit Margin	-33.96%
Debt/Equity Ratio	581.5%

How did AVAP perform over the long term?

See historical performance and comparison

We’ve recently updated our valuation analysis.

Valuation

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

Valuation Score

3/6

Valuation Score 3/6

Price-To-Sales vs Peers
Price-To-Sales vs Industry
Price-To-Sales vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

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

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for AVAP. This is calculated by dividing AVAP's market cap by their current preferred multiple.
What is AVAP's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$67.30m

AVAP 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	6.7x
Enterprise Value/EBITDA	8.7x
PEG Ratio	n/a

Price to Sales Ratio vs Peers

How does AVAP's PS Ratio compare to its peers?

AVAP PS Ratio vs Peers

The above table shows the PS ratio for AVAP vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PS	Estimated Growth	Market Cap
Peer Average	0.8x
FLO Flowtech Fluidpower	0.7x	5.3%	UK£74.3m
DNA3 Doric Nimrod Air Three	1.4x	n/a	UK£104.5m
HSS HSS Hire Group	0.3x	5.3%	UK£101.2m
BMT Braime Group	0.8x	n/a	UK£26.4m
AVAP Avation	0.6x	23.6%	UK£55.5m

Price-To-Sales vs Peers: AVAP is good value based on its Price-To-Sales Ratio (0.6x) compared to the peer average (0.8x).

Price to Earnings Ratio vs Industry

How does AVAP's PE Ratio compare vs other companies in the GB Trade Distributors Industry?

Price-To-Sales vs Industry: AVAP is good value based on its Price-To-Sales Ratio (0.6x) compared to the UK Trade Distributors industry average (0.8x)

Price to Sales Ratio vs Fair Ratio

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

AVAP PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio	0.6x
Fair PS Ratio	12.7x

Price-To-Sales vs Fair Ratio: AVAP is good value based on its Price-To-Sales Ratio (0.6x) compared to the estimated Fair Price-To-Sales Ratio (12.7x).

Share Price vs Fair Value

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

Below Fair Value: AVAP (£0.8) is trading above our estimate of fair value (£0.53)

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

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Insufficient data to show price forecast.

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Future Growth

How is Avation forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

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

122.9%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: AVAP is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (0.9%).

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

High Growth Earnings: AVAP is expected to become profitable in the next 3 years.

Revenue vs Market: AVAP's revenue (23.6% per year) is forecast to grow faster than the UK market (4.4% per year).

High Growth Revenue: AVAP's revenue (23.6% per year) is forecast to grow faster than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: Insufficient data to determine if AVAP's Return on Equity is forecast to be high in 3 years time

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Past Performance

How has Avation performed over the past 5 years?

Past Performance Score

0/6

Past Performance Score 0/6

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

-53.0%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: AVAP is currently unprofitable.

Growing Profit Margin: AVAP is currently unprofitable.

Past Earnings Growth Analysis

Earnings Trend: AVAP is unprofitable, and losses have increased over the past 5 years at a rate of 53% per year.

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

Earnings vs Industry: AVAP is unprofitable, making it difficult to compare its past year earnings growth to the Trade Distributors industry (56.2%).

Return on Equity

High ROE: AVAP has a negative Return on Equity (-25.16%), as it is currently unprofitable.

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Financial Health

How is Avation's financial position?

Financial Health Score

0/6

Financial Health Score 0/6

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

Financial Position Analysis

Short Term Liabilities: AVAP's short term assets ($190.1M) do not cover its short term liabilities ($249.0M).

Long Term Liabilities: AVAP's short term assets ($190.1M) do not cover its long term liabilities ($804.1M).

Debt to Equity History and Analysis

Debt Level: AVAP's net debt to equity ratio (503%) is considered high.

Reducing Debt: AVAP's debt to equity ratio has increased from 402.2% to 581.5% over the past 5 years.

Debt Coverage: AVAP's debt is not well covered by operating cash flow (7.1%).

Interest Coverage: AVAP's interest payments on its debt are not well covered by EBIT (0.7x coverage).

Balance Sheet

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Dividend

What is Avation 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
Cash Flow Coverage

15.60%

Forecast Dividend Yield

Dividend Yield vs Market

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

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

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

Earnings Payout to Shareholders

Earnings Coverage: AVAP is not paying a notable dividend for the UK market.

Cash Payout to Shareholders

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

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Management

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

3.4yrs

Average management tenure

CEO

Avation has no CEO, or we have no data on them.

Leadership Team

Experienced Management: AVAP's management team is considered experienced (3.4 years average tenure).

Board Members

Experienced Board: AVAP's board of directors are considered experienced (9.5 years average tenure).

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	2022/08/14 00:00
End of Day Share Price	2022/08/12 00:00
Earnings	2021/12/31
Annual Earnings	2021/06/30