LSE:PTEC

Stock Analysis Report

Executive Summary

Playtech Plc develops and sells software products for the online and land-based gambling industries worldwide.

Rewards

Trading at 60.1% below its fair value

Earnings are forecast to grow 46.34% per year

Risk Analysis

Has a high level of debt

Dividend of 2.64% is not well covered by earnings

Profit margins (1.8%) are lower than last year (33%)



Snowflake Analysis

Adequate balance sheet and fair value.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

-0.1%

PTEC

1.3%

GB Hospitality

2.3%

GB Market


1 Year Return

-5.6%

PTEC

17.9%

GB Hospitality

10.7%

GB Market

Return vs Industry: PTEC underperformed the UK Hospitality industry which returned 17.9% over the past year.

Return vs Market: PTEC underperformed the UK Market which returned 10.7% over the past year.


Shareholder returns

PTECIndustryMarket
7 Day-0.1%1.3%2.3%
30 Day-3.8%-1.5%2.5%
90 Day-9.5%2.2%3.0%
1 Year-2.1%-5.6%21.3%17.9%16.4%10.7%
3 Year-44.7%-50.8%35.3%21.3%21.3%5.8%
5 Year-26.3%-40.6%57.8%32.9%41.0%8.7%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: PTEC (£3.86) is trading below our estimate of fair value (£9.68)

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


Price To Earnings Ratio

PE vs Industry: PTEC is poor value based on its PE Ratio (51.2x) compared to the Hospitality industry average (27.3x).

PE vs Market: PTEC is poor value based on its PE Ratio (51.2x) compared to the UK market (17.6x).


Price to Earnings Growth Ratio

PEG Ratio: PTEC is poor value based on its PEG Ratio (1.1x)


Price to Book Ratio

PB vs Industry: PTEC is good value based on its PB Ratio (1.1x) compared to the GB Hospitality industry average (1.6x).


Next Steps

Future Growth

How is Playtech forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

46.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: PTEC's forecast earnings growth (46.3% per year) is above the savings rate (0.5%).

Earnings vs Market: PTEC's earnings (46.3% per year) are forecast to grow faster than the UK market (12.3% per year).

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

Revenue vs Market: PTEC's revenue (2.3% per year) is forecast to grow slower than the UK market (3.5% per year).

High Growth Revenue: PTEC's revenue (2.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: PTEC's Return on Equity is forecast to be low in 3 years time (12.2%).


Next Steps

Past Performance

How has Playtech performed over the past 5 years?

2.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: PTEC has high quality earnings.

Growing Profit Margin: PTEC's current net profit margins (1.8%) are lower than last year (33%).


Past Earnings Growth Analysis

Earnings Trend: PTEC's earnings have grown by 2.7% per year over the past 5 years.

Accelerating Growth: PTEC's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: PTEC had negative earnings growth (-89.6%) over the past year, making it difficult to compare to the Hospitality industry average (4.9%).


Return on Equity

High ROE: PTEC's Return on Equity (2.3%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Playtech's financial position?


Financial Position Analysis

Short Term Liabilities: PTEC's short term assets (€1.2B) exceed its short term liabilities (€931.3M).

Long Term Liabilities: PTEC's short term assets (€1.2B) exceed its long term liabilities (€1.1B).


Debt to Equity History and Analysis

Debt Level: PTEC's debt to equity ratio (90.2%) is considered high.

Reducing Debt: PTEC's debt to equity ratio has increased from 0.3% to 90.2% over the past 5 years.

Debt Coverage: PTEC's debt is well covered by operating cash flow (25.1%).

Interest Coverage: PTEC's interest payments on its debt are well covered by EBIT (6.7x coverage).


Balance Sheet

Inventory Level: PTEC has a low level of unsold assets or inventory.

Debt Coverage by Assets: PTEC's debt is covered by short term assets (assets are 1x debt).


Next Steps

Dividend

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

2.64%

Current Dividend Yield


Dividend Yield vs Market

company2.6%marketbottom25%1.9%markettop25%5.1%industryaverage2.5%forecastin3Years4.5%

Current dividend yield vs market & industry

Notable Dividend: PTEC's dividend (2.64%) is higher than the bottom 25% of dividend payers in the UK market (1.9%).

High Dividend: PTEC's dividend (2.64%) is low compared to the top 25% of dividend payers in the UK market (5.06%).


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (200%), PTEC's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: PTEC's dividends in 3 years are forecast to be well covered by earnings (39.3% payout ratio).


Next Steps

Management

What is the CEO of Playtech's salary, the management and board of directors tenure and is there insider trading?

3.2yrs

Average management tenure


CEO

Mor Weizer (43yo)

12.6yrs

Tenure

€3,016,985

Compensation

Mr. Mor Weizer, also known as Mor, serves as the Chief Executive Officer of Playtech Inc. Mr. Weizer has been the Chief Executive Officer and Executive Director of Playtech plc since May 2, 2007. Mr. Weize ...


CEO Compensation Analysis

Compensation vs Market: Mor's total compensation ($USD3.36M) is above average for companies of similar size in the UK market ($USD1.85M).

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


Management Age and Tenure

3.2yrs

Average Tenure

Experienced Management: PTEC's management team is considered experienced (3.2 years average tenure).


Board Age and Tenure

2.1yrs

Average Tenure

54yo

Average Age

Experienced Board: PTEC's board of directors are not considered experienced ( 2.1 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUK£20,44827 Jun 19
John Jackson
EntityIndividual
Role
Lead Director
Senior Independent Director
Shares5,000
Max PriceUK£4.09
BuyUK£62,68701 Mar 19
Moran Weizer
EntityIndividual
Role
Chief Executive Officer
CEO & Executive Director
Shares14,750
Max PriceUK£4.25
BuyUK£18,81001 Mar 19
Andrew Smith
EntityIndividual
Role
Member of the Board of Directors
CFO & Executive Director
Shares4,500
Max PriceUK£4.18

Ownership Breakdown

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


Management Team

  • Mor Weizer (43yo)

    CEO & Executive Director

    • Tenure: 12.6yrs
    • Compensation: €3.02m
  • Ron Hoffman (42yo)

    Chief Executive Officer of TradeTech Group

    • Tenure: 2.9yrs
    • Compensation: €1.35m
  • Shimon Akad

    Chief Operating Officer

    • Tenure: 0yrs
  • Chris McGinnis

    Director of Investor Relations & Strategic Analysis

    • Tenure: 0yrs
  • Andy Smith

    CFO & Executive Director

    • Tenure: 2.9yrs
    • Compensation: €962.32k
  • Ian Ince

    Head of Regulatory Affairs & Compliance

    • Tenure: 0yrs
  • Francesco Rodano

    Chief Policy Officer

    • Tenure: 3.5yrs
  • James Newman

    Director of Corporate Affairs

    • Tenure: 0yrs
  • Alex Latner

    General Counsel

    • Tenure: 0yrs
  • Robert Penfold

    Head of Internal Audit

    • Tenure: 0yrs

Board Members

  • Alan Jackson (75yo)

    Non-Executive Chairman of Board

    • Tenure: 6.2yrs
    • Compensation: €442.89k
  • Ian Penrose (53yo)

    Non-Executive Director

    • Tenure: 1.3yrs
    • Compensation: €39.26k
  • John Jackson (72yo)

    Senior Independent Director

    • Tenure: 0.6yrs
    • Compensation: €118.56k
  • John Krumins (55yo)

    Independent Non-Executive Director

    • Tenure: 0.7yrs
  • Mor Weizer (43yo)

    CEO & Executive Director

    • Tenure: 12.6yrs
    • Compensation: €3.02m
  • Anna Massion (41yo)

    Independent Non-Executive Director

    • Tenure: 0.7yrs
  • Andy Smith

    CFO & Executive Director

    • Tenure: 2.9yrs
    • Compensation: €962.32k
  • Claire Milne

    Non-Executive Director

    • Tenure: 3.4yrs
    • Compensation: €118.56k

Company Information

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


Key Information

  • Name: Playtech plc
  • Ticker: PTEC
  • Exchange: LSE
  • Founded: 1999
  • Industry: Casinos and Gaming
  • Sector: Consumer Services
  • Market Cap: UK£1.165b
  • Shares outstanding: 301.81m
  • Website: https://www.playtech.com

Number of Employees


Location

  • Playtech plc
  • St George’s Court
  • Ground Floor
  • Douglas
  • IM1 1EE
  • Isle of Man

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
PTECLSE (London Stock Exchange)YesOrdinary SharesGBGBPMar 2006
PL8DB (Deutsche Boerse AG)YesOrdinary SharesDEEURMar 2006
PYTC.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDMar 2006
PTECLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPMar 2006
PYTC.YOTCPK (Pink Sheets LLC)UNSPONSORED ADSUSUSDMay 2010

Biography

Playtech Plc develops and sells software products for the online and land-based gambling industries worldwide. The company operates through Gaming B2B, Gaming B2C, and Financial segments. It operates an on ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/15 20:49
End of Day Share Price2019/12/13 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


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.