We’ve recently updated our valuation analysis.

Mears Group Valuation

Is MER 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

  • Analyst Forecast

Key Valuation Metric

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

Other financial metrics that can be useful for relative valuation.

MER 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/Revenue0.4x
Enterprise Value/EBITDA7.1x
PEG Ratio-4.7x

Price to Earnings Ratio vs Peers

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

The above table shows the PE ratio for MER vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average19.2x
SUR Sureserve Group
9.4x8.8%UK£115.4m
RST Restore
22.1x6.7%UK£438.2m
JSG Johnson Service Group
18.9x17.5%UK£422.9m
INSE Inspired
26.5x44.5%UK£74.1m
MER Mears Group
9.3x-2.0%UK£212.2m

Price-To-Earnings vs Peers: MER is good value based on its Price-To-Earnings Ratio (9.3x) compared to the peer average (19.2x).


Price to Earnings Ratio vs Industry

How does MER's PE Ratio compare vs other companies in the GB Commercial Services Industry?

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
Industry Avg.n/a24.2%
n/an/an/a

Price-To-Earnings vs Industry: MER is good value based on its Price-To-Earnings Ratio (9.3x) compared to the European Commercial Services industry average (13.9x)


Price to Earnings Ratio vs Fair Ratio

What is MER'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.

MER PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio9.3x
Fair PE Ratio11.4x

Price-To-Earnings vs Fair Ratio: MER is good value based on its Price-To-Earnings Ratio (9.3x) compared to the estimated Fair Price-To-Earnings Ratio (11.4x).


Share Price vs Fair Value

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

Below Fair Value: MER (£1.91) is trading above our estimate of fair value (£1.77)

Significantly Below Fair Value: MER 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?

The above table shows the analyst MER forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentUK£1.91
UK£2.68
+40.6%
9.7%UK£3.08UK£2.31n/a5
Nov ’23UK£1.90
UK£2.66
+40.0%
10.8%UK£3.08UK£2.31n/a4
Oct ’23UK£1.93
UK£2.66
+37.8%
10.8%UK£3.08UK£2.31n/a4
Sep ’23UK£2.02
UK£2.66
+31.7%
10.8%UK£3.08UK£2.31n/a4
Aug ’23UK£1.95
UK£2.66
+36.2%
14.3%UK£3.08UK£2.04n/a4
Jul ’23UK£1.89
UK£2.66
+40.5%
14.3%UK£3.08UK£2.04n/a4
Jun ’23UK£1.95
UK£2.47
+26.5%
18.8%UK£3.08UK£2.00n/a4
May ’23UK£1.99
UK£2.58
+29.8%
14.2%UK£3.08UK£2.04n/a5
Apr ’23UK£2.10
UK£2.58
+23.0%
14.2%UK£3.08UK£2.04n/a5
Mar ’23UK£1.95
UK£2.58
+32.5%
14.2%UK£3.08UK£2.04n/a5
Feb ’23UK£1.98
UK£2.64
+33.3%
11.2%UK£3.08UK£2.30n/a5
Jan ’23UK£1.89
UK£2.49
+32.1%
14.8%UK£3.08UK£2.10n/a5
Dec ’22UK£1.90
UK£2.49
+31.1%
14.8%UK£3.08UK£2.10n/a5
Nov ’22UK£1.98
UK£2.46
+24.6%
16.1%UK£3.08UK£2.05UK£1.905
Oct ’22UK£2.00
UK£2.46
+23.0%
16.1%UK£3.08UK£2.05UK£1.935
Sep ’22UK£2.24
UK£2.46
+9.8%
16.1%UK£3.08UK£2.05UK£2.025
Aug ’22UK£1.90
UK£2.43
+27.9%
17.7%UK£3.08UK£1.90UK£1.955
Jul ’22UK£1.84
UK£2.41
+31.0%
18.6%UK£3.08UK£1.90UK£1.895
Jun ’22UK£1.88
UK£2.41
+28.2%
18.6%UK£3.08UK£1.90UK£1.955
May ’22UK£1.95
UK£2.35
+20.5%
21.9%UK£3.08UK£1.70UK£1.995
Apr ’22UK£1.92
UK£2.35
+22.4%
21.9%UK£3.08UK£1.70UK£2.105
Mar ’22UK£1.72
UK£2.01
+17.0%
22.4%UK£2.75UK£1.60UK£1.954
Feb ’22UK£1.52
UK£1.99
+30.8%
23.9%UK£2.75UK£1.50UK£1.984
Jan ’22UK£1.54
UK£1.99
+29.1%
23.9%UK£2.75UK£1.50UK£1.894
Dec ’21UK£1.55
UK£1.89
+21.8%
29.6%UK£2.75UK£1.30UK£1.904
Nov ’21UK£1.06
UK£1.68
+59.5%
37.5%UK£2.75UK£1.15UK£1.984

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.


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