Hotel Chocolat Group (AIM:HOTC) - Share price, News & Analysis

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

HOTC Stock Overview

Hotel Chocolat Group plc manufactures and retails chocolates under the Hotel Chocolat brand name in the United Kingdom, rest of Europe, Saint Lucia, the United States, Japan, and internationally.

Rewards

Trading at 79% below our estimate of its fair value

Earnings are forecast to grow 18.99% per year

Became profitable this year

Risk Analysis

High level of non-cash earnings

Shareholders have been diluted in the past year

Hotel Chocolat Group Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Hotel Chocolat Group
Historical stock prices
Current Share Price	UK£2.85
52 Week High	UK£5.40
52 Week Low	UK£2.80
Beta	1.32
1 Month Change	-15.56%
3 Month Change	-33.72%
1 Year Change	-22.45%
3 Year Change	-15.18%
5 Year Change	-19.03%
Change since IPO	50.00%

Recent News & Updates

Jun 14

Returns On Capital At Hotel Chocolat Group (LON:HOTC) Paint A Concerning Picture

To find a multi-bagger stock, what are the underlying trends we should look for in a business? Firstly, we'd want to...

May 04

Is There Now An Opportunity In Hotel Chocolat Group plc (LON:HOTC)?

While Hotel Chocolat Group plc ( LON:HOTC ) might not be the most widely known stock at the moment, it saw significant...

Jan 25

Hotel Chocolat Group (LON:HOTC) Will Want To Turn Around Its Return Trends

Finding a business that has the potential to grow substantially is not easy, but it is possible if we look at a few key...

Shareholder Returns

	HOTC	GB Food	GB Market
7D	0%	1.8%	2.3%
1Y	-22.4%	-22.7%	-8.6%

Return vs Industry: HOTC matched the UK Food industry which returned -23.3% over the past year.

Return vs Market: HOTC underperformed the UK Market which returned -10.4% over the past year.

Price Volatility

Is HOTC's price volatile compared to industry and market?
HOTC volatility
HOTC Average Weekly Movement	7.3%
Food Industry Average Movement	4.5%
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: HOTC is not significantly more volatile than the rest of UK stocks over the past 3 months, typically moving +/- 7% a week.

Volatility Over Time: HOTC's weekly volatility (7%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1993	1,731	Angus Thirlwell	https://www.hotelchocolat.com

Hotel Chocolat Group plc manufactures and retails chocolates under the Hotel Chocolat brand name in the United Kingdom, rest of Europe, Saint Lucia, the United States, Japan, and internationally. It offers a range of chocolates, including gift, and rare and vintage chocolates, as well as coffee drinks, cocoa alcohols, and beauty products. The company sells its products through a network of stores, as well as through online subscription; and operates restaurants, hotels, and cocoa estates.

Hotel Chocolat Group Fundamentals Summary

How do Hotel Chocolat Group's earnings and revenue compare to its market cap?
HOTC fundamental statistics
Market Cap	UK£391.36m
Earnings (TTM)	UK£12.82m
Revenue (TTM)	UK£205.59m

30.5x

P/E Ratio

1.9x

P/S Ratio

Is HOTC overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
HOTC income statement (TTM)
Revenue	UK£205.59m
Cost of Revenue	UK£80.59m
Gross Profit	UK£125.00m
Other Expenses	UK£112.19m
Earnings	UK£12.82m

Last Reported Earnings

Dec 26, 2021

Next Earnings Date

n/a

Earnings per share (EPS)	0.093
Gross Margin	60.80%
Net Profit Margin	6.23%
Debt/Equity Ratio	0%

How did HOTC perform over the long term?

See historical performance and comparison

We’ve recently updated our valuation analysis.

Valuation

Is HOTC 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 HOTC?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for HOTC. This is calculated by dividing HOTC's market cap by their current preferred multiple.
What is HOTC's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	UK£391.36m

HOTC 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	1.8x
Enterprise Value/EBITDA	14.7x
PEG Ratio	1.6x

Price to Earnings Ratio vs Peers

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

HOTC PE Ratio vs Peers

The above table shows the PE ratio for HOTC vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	10.8x

Forward PE

Price-To-Earnings vs Peers: HOTC is expensive based on its Price-To-Earnings Ratio (30.5x) compared to the peer average (10.8x).

Price to Earnings Ratio vs Industry

How does HOTC's PE Ratio compare vs other companies in the U.K. Food Industry?

Price-To-Earnings vs Industry: HOTC is expensive based on its Price-To-Earnings Ratio (30.5x) compared to the UK Food industry average (15.7x)

Price to Earnings Ratio vs Fair Ratio

What is HOTC'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.

HOTC PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	30.5x
Fair PE Ratio	17.1x

Price-To-Earnings vs Fair Ratio: HOTC is expensive based on its Price-To-Earnings Ratio (30.5x) compared to the estimated Fair Price-To-Earnings Ratio (17.1x).

Share Price vs Fair Value

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

Below Fair Value: HOTC (£2.85) is trading below our estimate of fair value (£13.55)

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

Price to Earnings Growth Ratio

PEG Ratio: HOTC is poor value based on its PEG Ratio (1.6x)

Discover undervalued companies

Future Growth

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

Future Growth Score

3/6

Future Growth Score 3/6

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

19.0%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: HOTC's forecast earnings growth (19% per year) is above the savings rate (0.9%).

Earnings vs Market: HOTC's earnings (19% per year) are forecast to grow faster than the UK market (10.9% per year).

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

Revenue vs Market: HOTC's revenue (10.6% per year) is forecast to grow faster than the UK market (4.1% per year).

High Growth Revenue: HOTC's revenue (10.6% 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 HOTC's Return on Equity is forecast to be high in 3 years time

Discover growth companies

Past Performance

How has Hotel Chocolat 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

-17.7%

Historical annual earnings growth

Earnings and Revenue History

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

Growing Profit Margin: HOTC became profitable in the past.

Past Earnings Growth Analysis

Earnings Trend: HOTC's earnings have declined by 17.7% per year over the past 5 years.

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

Earnings vs Industry: HOTC has become profitable in the last year, making it difficult to compare its past year earnings growth to the Food industry (34.6%).

Return on Equity

High ROE: HOTC's Return on Equity (9.7%) is considered low.

Discover strong past performing companies

Financial Health

How is Hotel Chocolat Group'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: HOTC's short term assets (£121.1M) exceed its short term liabilities (£74.6M).

Long Term Liabilities: HOTC's short term assets (£121.1M) exceed its long term liabilities (£30.9M).

Debt to Equity History and Analysis

Debt Level: HOTC is debt free.

Reducing Debt: HOTC has no debt compared to 5 years ago when its debt to equity ratio was 21.2%.

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

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

Balance Sheet

Discover healthy companies

Dividend

What is Hotel Chocolat 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

Dividend Yield vs Market

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

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

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

Earnings Payout to Shareholders

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

Cash Payout to Shareholders

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

Discover strong dividend paying companies

Management

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

7.9yrs

Average management tenure

CEO

Angus Thirlwell (58 yo)

29.42yrs

Tenure

UK£247,110

Compensation

Mr. Angus Thirlwell is Board Adviser at Silverwood Brands plc. He Co-founded Hotel Chocolat Group plc in 1993 and serves as its Chief Executive Officer and has a particular focus on brand strategy, product...

CEO Compensation Analysis

Compensation vs Market: Angus's total compensation ($USD303.71K) is below average for companies of similar size in the UK market ($USD1.02M).

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

Leadership Team

Experienced Management: HOTC's management team is seasoned and experienced (7.9 years average tenure).

Board Members

Experienced Board: HOTC's board of directors are considered experienced (7.3 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 been diluted in the past year, with total shares outstanding growing by 9.1%.

Data	Last Updated (UTC time)
Company Analysis	2022/06/24 00:00
End of Day Share Price	2022/06/24 00:00
Earnings	2021/12/26
Annual Earnings	2021/06/27