LSE:QQ.

Stock Analysis Report

Executive Summary

QinetiQ Group plc operates as a science and engineering company worldwide.

Rewards

Trading at 24% below its fair value

Earnings are forecast to grow 4.44% per year

Earnings grew by 1.5% over the past year

Risk Analysis

No risks detected for QQ. from our risk checks.


Snowflake Analysis

Flawless balance sheet and undervalued.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

2.4%

QQ.

-2.3%

GB Aerospace & Defense

-0.4%

GB Market


1 Year Return

23.7%

QQ.

28.3%

GB Aerospace & Defense

6.6%

GB Market

Return vs Industry: QQ. underperformed the UK Aerospace & Defense industry which returned 28.3% over the past year.

Return vs Market: QQ. exceeded the UK Market which returned 6.6% over the past year.


Shareholder returns

QQ.IndustryMarket
7 Day2.4%-2.3%-0.4%
30 Day4.1%-1.9%-1.7%
90 Day12.7%9.4%5.4%
1 Year26.4%23.7%32.8%28.3%12.4%6.6%
3 Year49.9%39.6%29.5%16.0%18.5%3.4%
5 Year116.3%92.1%29.8%3.3%35.8%4.7%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

23.3%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: QQ. (£3.79) is trading below our estimate of fair value (£4.99)

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


Price To Earnings Ratio

PE vs Industry: QQ. is good value based on its PE Ratio (17.1x) compared to the Aerospace & Defense industry average (32.2x).

PE vs Market: QQ. is good value based on its PE Ratio (17.1x) compared to the UK market (18.6x).


Price to Earnings Growth Ratio

PEG Ratio: QQ. is poor value based on its PEG Ratio (3.8x)


Price to Book Ratio

PB vs Industry: QQ. is good value based on its PB Ratio (2.5x) compared to the GB Aerospace & Defense industry average (2.5x).


Next Steps

Future Growth

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

4.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: QQ.'s forecast earnings growth (4.4% per year) is above the savings rate (0.5%).

Earnings vs Market: QQ.'s earnings (4.4% per year) are forecast to grow slower than the UK market (13.1% per year).

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

Revenue vs Market: QQ.'s revenue (8% per year) is forecast to grow faster than the UK market (3.5% per year).

High Growth Revenue: QQ.'s revenue (8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: QQ.'s Return on Equity is forecast to be low in 3 years time (16.4%).


Next Steps

Past Performance

How has QinetiQ Group performed over the past 5 years?

7.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: QQ. has high quality earnings.

Growing Profit Margin: QQ.'s current net profit margins (12.9%) are lower than last year (14.4%).


Past Earnings Growth Analysis

Earnings Trend: QQ.'s earnings have grown by 7% per year over the past 5 years.

Accelerating Growth: QQ.'s earnings growth over the past year (1.5%) is below its 5-year average (7% per year).

Earnings vs Industry: QQ. earnings growth over the past year (1.5%) exceeded the Aerospace & Defense industry -13.2%.


Return on Equity

High ROE: QQ.'s Return on Equity (14.8%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is QinetiQ Group's financial position?


Financial Position Analysis

Short Term Liabilities: QQ.'s short term assets (£432.3M) exceed its short term liabilities (£327.2M).

Long Term Liabilities: QQ.'s short term assets (£432.3M) exceed its long term liabilities (£136.5M).


Debt to Equity History and Analysis

Debt Level: QQ. is debt free.

Reducing Debt: QQ. has no debt compared to 5 years ago when its debt to equity ratio was 0.1%.

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

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


Balance Sheet

Inventory Level: QQ. has a high level of physical assets or inventory.

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


Next Steps

Dividend

What is QinetiQ Group's current dividend yield, its reliability and sustainability?

1.72%

Current Dividend Yield


Dividend Yield vs Market

company1.7%marketbottom25%1.8%markettop25%5.1%industryaverage2.8%forecastin3Years1.9%

Current dividend yield vs market & industry

Notable Dividend: QQ.'s dividend (1.74%) isn’t notable compared to the bottom 25% of dividend payers in the UK market (1.81%).

High Dividend: QQ.'s dividend (1.74%) is low compared to the top 25% of dividend payers in the UK market (5.12%).


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (30.1%), QQ.'s dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: QQ.'s dividends in 3 years are forecast to be well covered by earnings (34.3% payout ratio).


Next Steps

Management

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

3.8yrs

Average management tenure


CEO

Steve Wadey (53yo)

4.8yrs

Tenure

UK£2,345,000

Compensation

Mr. Steve Wadey has been Chief Executive Officer of QinetiQ Group plc since April 27, 2015 and is responsible for its executive management and implementation of the strategy. Mr. Wadey has been an Executiv ...


CEO Compensation Analysis

Compensation vs Market: Steve's total compensation ($USD3.04M) is above average for companies of similar size in the UK market ($USD2.33M).

Compensation vs Earnings: Steve's compensation has increased by more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Steve Wadey
CEO & Executive Director4.8yrsUK£2.35m0.062% £1.3m
David Smith
CFO & Director3.1yrsUK£1.42m0.012% £252.4k
Ian Beresford
Group Director of Engineering & Operations3.8yrsno datano data
James Willis
Managing Director of Cyber2.6yrsno datano data
Jon Messent
Company Secretary & Group General Counsel9.1yrsno datano data
Michelle Cummins
Group Director of Human Resources4.1yrsno datano data
John Anderson
Managing Director of Air & Space0yrsno datano data
Vicky Weise
Chief of Staff4.8yrsno datano data
Iain Farley
Managing Director of International3.5yrsno datano data
Stephen Fitz-Gerald
Managing Director of Maritime2.6yrsno datano data

3.8yrs

Average Tenure

55yo

Average Age

Experienced Management: QQ.'s management team is considered experienced (3.8 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Steve Wadey
CEO & Executive Director4.8yrsUK£2.35m0.062% £1.3m
David Smith
CFO & Director3.1yrsUK£1.42m0.012% £252.4k
Paul Murray
Non-Executive Director9.3yrsUK£62.00k0.015% £318.7k
John Harper
Deputy Chairman & Senior Independent Non-Executive Director8yrsUK£73.00k0.0071% £153.2k
Neil Johnson
Independent Chairman of the Board0.6yrsno data0.0089% £191.5k
Ian Mason
Non-Executive Director5.7yrsUK£53.00k0.0018% £38.3k
Lynn Brubaker
Non-Executive Director4.1yrsUK£84.00k0.0021% £46.0k
Susan Jane Searle
Non-Executive Director5.9yrsUK£53.00k0.0044% £95.7k
James Burnell-Nugent
Non-Executive Director9.8yrsUK£63.00k0.0028% £59.6k

5.7yrs

Average Tenure

58yo

Average Age

Experienced Board: QQ.'s board of directors are considered experienced (5.7 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.


Recent Insider Transactions

Ownership Breakdown

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


Top Shareholders

Company Information

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


Key Information

  • Name: QinetiQ Group plc
  • Ticker: QQ.
  • Exchange: LSE
  • Founded: 2002
  • Industry: Aerospace and Defense
  • Sector: Capital Goods
  • Market Cap: UK£2.152b
  • Shares outstanding: 561.79m
  • Website: https://www.qinetiq.com

Number of Employees


Location

  • QinetiQ Group plc
  • Cody Technology Park
  • Ively Road
  • Farnborough
  • Hampshire
  • GU14 0LX
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
QQ.LSE (London Stock Exchange)YesOrdinary Shares with Par Value 1PGBGBPFeb 2006
QY6DB (Deutsche Boerse AG)YesOrdinary Shares with Par Value 1PDEEURFeb 2006
QNTQ.FOTCPK (Pink Sheets LLC)YesOrdinary Shares with Par Value 1PUSUSDFeb 2006
QQLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary Shares with Par Value 1PGBGBPFeb 2006
QNTQ.YOTCPK (Pink Sheets LLC)ADRUSUSDJan 2007

Biography

QinetiQ Group plc operates as a science and engineering company worldwide. It operates in EMEA Services and Global Products segments. The company offers air engineering services, test facilities, aircraft system integration and upgrades, aircraft life support and air traffic management services, unmanned aircraft systems, human factors integration and aero structure services, aircraft mission and runway debris detection technologies, safety and environmental management systems, empire test pilots schools, smart materials, and aircraft high intensity radiated fields and lightning workshops. It also provides platform protection, border and asset protection, robotics, infrastructure and base protection, wind farm impact assessment, proving ground, soldier system, research, and smart material products and services for land and critical infrastructure; and maritime stealth, platform readiness, command information, cyber security, design and optimization, and life support services, as well as smart materials, naval mission systems, naval combat systems engineering courses, and network cueing systems. In addition, the company offers counter drone, stand-off threat detection, electronic surveillance, asset tracking, space security, research, communications and networks, command and control, data fusion and exploitation, fast jet sensor fusion training, aircraft mission, air traffic management, and naval mission systems for command, control, communications, computers, intelligence, surveillance, and reconnaissance; and cyber and digital resilience systems. Further, it provides avionics, berthing and docking, electric propulsion, exploration, ground segment and operations, microgravity research, remote sensing, small satellites, space security, spaceflight training, and telescope baffle products for space; weapons; autonomous and robotic systems; and training and advisory services. The company was incorporated in 2002 and is headquartered in Farnborough, the United Kingdom. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/20 21:13
End of Day Share Price2020/02/20 00:00
Earnings2019/09/30
Annual Earnings2019/03/31


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.