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STEM

SThree LSE:STEM Stock Report

Last Price

UK£3.81

Market Cap

UK£504.8m

7D

3.0%

1Y

-26.1%

Updated

18 Aug, 2022

Data

Company Financials +
STEM fundamental analysis
Snowflake Score
Valuation5/6
Future Growth2/6
Past Performance5/6
Financial Health6/6
Dividends3/6

STEM Stock Overview

SThree plc provides specialist contract and permanent staffing services for technology, engineering, life sciences, banking and finance, and other sectors.

SThree Competitors

Price History & Performance

Summary of all time highs, changes and price drops for SThree
Historical stock prices
Current Share PriceUK£3.81
52 Week HighUK£6.10
52 Week LowUK£3.13
Beta1.06
1 Month Change-2.93%
3 Month Change5.69%
1 Year Change-26.12%
3 Year Change44.13%
5 Year Change16.72%
Change since IPO86.06%

Recent News & Updates

Aug 17
SThree's (LON:STEM) Dividend Will Be Increased To £0.05

SThree's (LON:STEM) Dividend Will Be Increased To £0.05

The board of SThree plc ( LON:STEM ) has announced that it will be paying its dividend of £0.05 on the 2nd of December...

Jun 24
Returns On Capital Signal Tricky Times Ahead For SThree (LON:STEM)

Returns On Capital Signal Tricky Times Ahead For SThree (LON:STEM)

What trends should we look for it we want to identify stocks that can multiply in value over the long term? Firstly...

Shareholder Returns

STEMGB Professional ServicesGB Market
7D3.0%0.8%0.6%
1Y-26.1%-2.5%-7.0%

Return vs Industry: STEM underperformed the UK Professional Services industry which returned -3.5% over the past year.

Return vs Market: STEM underperformed the UK Market which returned -9% over the past year.

Price Volatility

Is STEM's price volatile compared to industry and market?
STEM volatility
STEM Average Weekly Movement5.8%
Professional Services Industry Average Movement4.0%
Market Average Movement5.4%
10% most volatile stocks in GB Market10.9%
10% least volatile stocks in GB Market2.7%

Stable Share Price: STEM is not significantly more volatile than the rest of UK stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: STEM's weekly volatility (6%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
19862,800Timo Lehnehttps://www.sthree.com

SThree plc provides specialist contract and permanent staffing services for technology, engineering, life sciences, banking and finance, and other sectors. It offers permanent, contract, project, retained, and executive search recruitment solutions, as well as support and mobility services. The company provides its services under the Computer Futures, Progressive, Huxley Associates, Real Staffing Group, Global Enterprise Partners, JP Gray, Madison Black, and Newington International brands.

SThree Fundamentals Summary

How do SThree's earnings and revenue compare to its market cap?
STEM fundamental statistics
Market CapUK£504.82m
Earnings (TTM)UK£55.06m
Revenue (TTM)UK£1.49b

9.2x

P/E Ratio

0.3x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
STEM income statement (TTM)
RevenueUK£1.49b
Cost of RevenueUK£1.09b
Gross ProfitUK£394.50m
Other ExpensesUK£339.44m
EarningsUK£55.06m

Last Reported Earnings

May 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)0.42
Gross Margin26.51%
Net Profit Margin3.70%
Debt/Equity Ratio0.007%

How did STEM perform over the long term?

See historical performance and comparison

Dividends

3.4%

Current Dividend Yield

31%

Payout Ratio

Does STEM pay a reliable dividends?

See STEM dividend history and benchmarks
When do you need to buy STEM by to receive an upcoming dividend?
SThree dividend dates
Ex Dividend DateNov 03 2022
Dividend Pay DateDec 02 2022
Days until Ex dividend76 days
Days until Dividend pay date105 days

Does STEM pay a reliable dividends?

See STEM dividend history and benchmarks
We’ve recently updated our valuation analysis.

Valuation

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

Valuation Score

5/6

Valuation Score 5/6

  • 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 STEM?

Other financial metrics that can be useful for relative valuation.

STEM 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/Revenue0.3x
Enterprise Value/EBITDA5.3x
PEG Ratio34.1x

Price to Earnings Ratio vs Peers

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

STEM PE Ratio vs Peers
The above table shows the PE ratio for STEM vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average27.1x
RWA Robert Walters
10.3x8.1%UK£387.6m
IPEL Impellam Group
15.8xn/aUK£209.8m
PAGE PageGroup
8.9x-1.8%UK£1.4b
MIND Mind Gym
73.4xn/aUK£117.6m
STEM SThree
9.2x0.3%UK£504.8m

Price-To-Earnings vs Peers: STEM is good value based on its Price-To-Earnings Ratio (9.2x) compared to the peer average (27.1x).


Price to Earnings Ratio vs Industry

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

Price-To-Earnings vs Industry: STEM is good value based on its Price-To-Earnings Ratio (9.2x) compared to the UK Professional Services industry average (17.8x)


Price to Earnings Ratio vs Fair Ratio

What is STEM'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.

STEM PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio9.2x
Fair PE Ratio18.3x

Price-To-Earnings vs Fair Ratio: STEM is good value based on its Price-To-Earnings Ratio (9.2x) compared to the estimated Fair Price-To-Earnings Ratio (18.3x).


Share Price vs Fair Value

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

Below Fair Value: STEM (£3.81) is trading below our estimate of fair value (£6.87)

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


Analyst Price Targets

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

Analyst Forecast: Target price is more than 20% higher than the current share price, but analysts are not within a statistically confident range of agreement.


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Future Growth

How is SThree forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


0.3%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: STEM's forecast earnings growth (0.3% per year) is below the savings rate (0.9%).

Earnings vs Market: STEM's earnings (0.3% per year) are forecast to grow slower than the UK market (9.8% per year).

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

Revenue vs Market: STEM's revenue (5% per year) is forecast to grow faster than the UK market (4.6% per year).

High Growth Revenue: STEM's revenue (5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: STEM's Return on Equity is forecast to be high in 3 years time (25.9%)


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Past Performance

How has SThree performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


7.5%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: STEM has a high level of non-cash earnings.

Growing Profit Margin: STEM's current net profit margins (3.7%) are higher than last year (2.4%).


Past Earnings Growth Analysis

Earnings Trend: STEM's earnings have grown by 7.5% per year over the past 5 years.

Accelerating Growth: STEM's earnings growth over the past year (86.5%) exceeds its 5-year average (7.5% per year).

Earnings vs Industry: STEM earnings growth over the past year (86.5%) exceeded the Professional Services industry 49.8%.


Return on Equity

High ROE: STEM's Return on Equity (31.2%) is considered high.


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Financial Health

How is SThree's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: STEM's short term assets (£391.2M) exceed its short term liabilities (£231.3M).

Long Term Liabilities: STEM's short term assets (£391.2M) exceed its long term liabilities (£22.7M).


Debt to Equity History and Analysis

Debt Level: STEM has more cash than its total debt.

Reducing Debt: STEM's debt to equity ratio has reduced from 12.3% to 0.01% over the past 5 years.

Debt Coverage: STEM's debt is well covered by operating cash flow (277938.5%).

Interest Coverage: STEM's interest payments on its debt are well covered by EBIT (120.1x coverage).


Balance Sheet


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Dividend

What is SThree current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage


3.42%

Current Dividend Yield

Upcoming Dividend Payment

TodayAug 19 2022Ex Dividend DateNov 03 2022Dividend Pay DateDec 02 202229 days from Ex DividendBuy in the next 76 days to receive the upcoming dividend

Dividend Yield vs Market

Notable Dividend: STEM's dividend (3.42%) is higher than the bottom 25% of dividend payers in the UK market (1.88%).

High Dividend: STEM's dividend (3.42%) is low compared to the top 25% of dividend payers in the UK market (5.23%).


Stability and Growth of Payments

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

Growing Dividend: STEM's dividend payments have fallen over the past 10 years.


Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (31.3%), STEM's dividend payments are well covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: With its reasonable cash payout ratio (51.8%), STEM's dividend payments are covered by cash flows.


Discover strong dividend paying companies

Management

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

1.6yrs

Average management tenure


CEO

Timo Lehne

0.58yr

Tenure

Mr. Timo Lehne serves as Chief Executive Officer and Executive Director of SThree plc since April 2022 and January 01, 2022 respectively, and served as Interim Chief Executive Officer until April 2022. He...


Leadership Team

Experienced Management: STEM's management team is not considered experienced ( 1.6 years average tenure), which suggests a new team.


Board Members

Experienced Board: STEM's board of directors are considered experienced (4.9 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.


Top Shareholders

Company Information

SThree plc's employee growth, exchange listings and data sources


Key Information

  • Name: SThree plc
  • Ticker: STEM
  • Exchange: LSE
  • Founded: 1986
  • Industry: Human Resource and Employment Services
  • Sector: Commercial Services
  • Implied Market Cap: UK£504.816m
  • Shares outstanding: 132.67m
  • Website: https://www.sthree.com

Number of Employees


Location

  • SThree plc
  • 75 King William Street
  • 1st Floor
  • London
  • Greater London
  • EC4N 7BE
  • United Kingdom

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/08/18 00:00
End of Day Share Price2022/08/18 00:00
Earnings2022/05/31
Annual Earnings2021/11/30


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.