Ten Entertainment Group (LSE:TEG) - Share price, News & Analysis

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

TEG (£2.2) is trading below our estimate of [[fair value]] (£4.73)

TEG fundamental analysis
Snowflake Score
Valuation	2/6
Future Growth	4/6
Past Performance	1/6
Financial Health	3/6
Dividends	0/6

TEG Stock Overview

Ten Entertainment Group plc, together with its subsidiaries, engages in tenpin bowling operations in the United Kingdom.

Rewards

Trading at 53.5% below our estimate of its fair value

Earnings are forecast to grow 33.21% per year

Became profitable this year

Risk Analysis

Large one-off items impacting financial results

Ten Entertainment Group Competitors

Hollywood Bowl Group

LSE:BOWL

UK£364.4m

Quixant

AIM:QXT

UK£102.7m

Fuller Smith & Turner

LSE:FSTA

UK£366.7m

Rank Group

LSE:RNK

UK£390.7m

Price History & Performance

Summary of all time highs, changes and price drops for Ten Entertainment Group
Historical stock prices
Current Share Price	UK£2.20
52 Week High	UK£2.85
52 Week Low	UK£2.14
Beta	1.33
1 Month Change	-13.04%
3 Month Change	-11.29%
1 Year Change	-5.17%
3 Year Change	-2.22%
5 Year Change	33.94%
Change since IPO	33.33%

Recent News & Updates

Mar 31

At UK£2.66, Is It Time To Put Ten Entertainment Group plc (LON:TEG) On Your Watch List?

Ten Entertainment Group plc ( LON:TEG ), might not be a large cap stock, but it received a lot of attention from a...

Jan 13

Ten Entertainment Group plc's (LON:TEG) Intrinsic Value Is Potentially 40% Above Its Share Price

Does the January share price for Ten Entertainment Group plc ( LON:TEG ) reflect what it's really worth? Today, we will...

Shareholder Returns

	TEG	GB Hospitality	GB Market
7D	-12.0%	2.0%	2.3%
1Y	-5.2%	-17.7%	-8.6%

Return vs Industry: TEG exceeded the UK Hospitality industry which returned -17.7% over the past year.

Return vs Market: TEG exceeded the UK Market which returned -8.6% over the past year.

Price Volatility

Is TEG's price volatile compared to industry and market?
TEG volatility
TEG Average Weekly Movement	4.7%
Hospitality Industry Average Movement	5.6%
Market Average Movement	5.5%
10% most volatile stocks in GB Market	10.8%
10% least volatile stocks in GB Market	2.8%

Stable Share Price: TEG is not significantly more volatile than the rest of UK stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: TEG's weekly volatility (5%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2017	1,410	Graham Blackwell	https://www.tegplc.co.uk

Ten Entertainment Group plc, together with its subsidiaries, engages in tenpin bowling operations in the United Kingdom. The company operates 46 bowling sites with approximately 1,101 bowling lanes under the Tenpin brand. It also provides family entertainment space, soft plays, laser tag arenas, karaoke rooms, escape rooms, pool tables, and amusement machines.

Ten Entertainment Group Fundamentals Summary

How do Ten Entertainment Group's earnings and revenue compare to its market cap?
TEG fundamental statistics
Market Cap	UK£150.69m
Earnings (TTM)	UK£4.01m
Revenue (TTM)	UK£67.52m

37.6x

P/E Ratio

2.2x

P/S Ratio

Is TEG overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
TEG income statement (TTM)
Revenue	UK£67.52m
Cost of Revenue	UK£22.99m
Gross Profit	UK£44.53m
Other Expenses	UK£40.52m
Earnings	UK£4.01m

Last Reported Earnings

Dec 26, 2021

Next Earnings Date

n/a

Earnings per share (EPS)	0.058
Gross Margin	65.95%
Net Profit Margin	5.93%
Debt/Equity Ratio	40.6%

How did TEG perform over the long term?

See historical performance and comparison

We’ve recently updated our valuation analysis.

Valuation

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

Valuation Score

2/6

Valuation Score 2/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

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

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for TEG. This is calculated by dividing TEG's market cap by their current preferred multiple.
What is TEG's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	UK£150.69m

TEG 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	5.2x
Enterprise Value/EBITDA	22.8x
PEG Ratio	1.1x

Price to Earnings Ratio vs Peers

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

TEG PE Ratio vs Peers

The above table shows the PE ratio for TEG vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	26.9x
BOWL Hollywood Bowl Group	9x	-5.2%	UK£364.4m
QXT Quixant	35.4x	32.7%	UK£102.7m
FSTA Fuller Smith & Turner	51.7x	31.7%	UK£366.7m
RNK Rank Group	11.5x	n/a	UK£390.7m
TEG Ten Entertainment Group	37.6x	33.2%	UK£150.7m

Forward PE

Price-To-Earnings vs Peers: TEG is expensive based on its Price-To-Earnings Ratio (37.6x) compared to the peer average (26.9x).

Price to Earnings Ratio vs Industry

How does TEG's PE Ratio compare vs other companies in the GB Hospitality Industry?

Price-To-Earnings vs Industry: TEG is expensive based on its Price-To-Earnings Ratio (37.6x) compared to the UK Hospitality industry average (13.9x)

Price to Earnings Ratio vs Fair Ratio

What is TEG'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.

TEG PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	37.6x
Fair PE Ratio	20.7x

Price-To-Earnings vs Fair Ratio: TEG is expensive based on its Price-To-Earnings Ratio (37.6x) compared to the estimated Fair Price-To-Earnings Ratio (20.7x).

Share Price vs Fair Value

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

Below Fair Value: TEG (£2.2) is trading below our estimate of fair value (£4.73)

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

Price to Earnings Growth Ratio

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

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Future Growth

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

Future Growth Score

4/6

Future Growth Score 4/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

33.2%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: TEG's forecast earnings growth (33.2% per year) is above the savings rate (0.9%).

Earnings vs Market: TEG's earnings (33.2% per year) are forecast to grow faster than the UK market (11% per year).

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

Revenue vs Market: TEG's revenue (15.2% per year) is forecast to grow faster than the UK market (4.1% per year).

High Growth Revenue: TEG's revenue (15.2% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

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

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Past Performance

How has Ten Entertainment Group performed over the past 5 years?

Past Performance Score

1/6

Past Performance Score 1/6

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

-45.6%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: TEG has a large one-off gain of £1.4M impacting its December 26 2021 financial results.

Growing Profit Margin: TEG became profitable in the past.

Past Earnings Growth Analysis

Earnings Trend: TEG's earnings have declined by 45.6% per year over the past 5 years.

Accelerating Growth: TEG has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: TEG has become profitable in the last year, making it difficult to compare its past year earnings growth to the Hospitality industry (186.6%).

Return on Equity

High ROE: TEG's Return on Equity (11.8%) is considered low.

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Financial Health

How is Ten Entertainment Group's financial position?

Financial Health Score

3/6

Financial Health Score 3/6

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

Financial Position Analysis

Short Term Liabilities: TEG's short term assets (£18.2M) do not cover its short term liabilities (£30.2M).

Long Term Liabilities: TEG's short term assets (£18.2M) do not cover its long term liabilities (£195.1M).

Debt to Equity History and Analysis

Debt Level: TEG's net debt to equity ratio (6.8%) is considered satisfactory.

Reducing Debt: TEG's debt to equity ratio has reduced from 1366.1% to 40.6% over the past 5 years.

Debt Coverage: TEG's debt is well covered by operating cash flow (197%).

Interest Coverage: TEG's interest payments on its debt are not well covered by EBIT (1.5x coverage).

Balance Sheet

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Dividend

What is Ten Entertainment Group 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
Future Dividend Coverage

5.34%

Forecast Dividend Yield

Dividend Yield vs Market

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

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

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

Earnings Payout to Shareholders

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

Cash Payout to Shareholders

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

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Management

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

1.9yrs

Average management tenure

CEO

Graham Blackwell (52 yo)

1.75yrs

Tenure

UK£667,000

Compensation

Mr. Graham Blackwell serves as Chief Executive Officer at Ten Entertainment Group plc since 2021. He served as Chief Operating Officer at Ten Entertainment Group plc since 2020 until 2021. He has been Chie...

CEO Compensation Analysis

Compensation vs Market: Graham's total compensation ($USD819.78K) is about average for companies of similar size in the UK market ($USD685.27K).

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

Leadership Team

Experienced Management: TEG's management team is not considered experienced ( 1.9 years average tenure), which suggests a new team.

Board Members

Experienced Board: TEG's board of directors are considered experienced (4.4 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: TEG 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.

Data	Last Updated (UTC time)
Company Analysis	2022/06/26 00:00
End of Day Share Price	2022/06/24 00:00
Earnings	2021/12/26
Annual Earnings	2021/12/26