Ergomed (AIM:ERGO) - Share price, News & Analysis

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

ERGO Stock Overview

Rewards

Trading at 56.2% below our estimate of its fair value

Earnings are forecast to grow 14.76% per year

Earnings have grown 59.7% per year over the past 5 years

Risk Analysis

Large one-off items impacting financial results

Ergomed Competitors

ICON

NasdaqGS:ICLR

US$17.2b

Charles River Laboratories International

NYSE:CRL

US$12.0b

Price History & Performance

Summary of all time highs, changes and price drops for Ergomed
Historical stock prices
Current Share Price	UK£10.60
52 Week High	UK£15.85
52 Week Low	UK£9.25
Beta	0.94
1 Month Change	-22.17%
3 Month Change	-5.36%
1 Year Change	-17.51%
3 Year Change	369.03%
5 Year Change	422.17%
Change since IPO	552.31%

Shareholder Returns

	ERGO	GB Life Sciences	GB Market
7D	8.1%	8.6%	3.1%
1Y	-17.5%	-45.5%	-3.2%

Return vs Industry: ERGO exceeded the UK Life Sciences industry which returned -45.5% over the past year.

Return vs Market: ERGO underperformed the UK Market which returned -3.2% over the past year.

Price Volatility

Is ERGO's price volatile compared to industry and market?
ERGO volatility
ERGO Average Weekly Movement	8.0%
Life Sciences Industry Average Movement	9.8%
Market Average Movement	6.2%
10% most volatile stocks in GB Market	11.8%
10% least volatile stocks in GB Market	3.2%

Stable Share Price: ERGO is not significantly more volatile than the rest of UK stocks over the past 3 months, typically moving +/- 8% a week.

Volatility Over Time: ERGO's weekly volatility (8%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1997	1,371	n/a	https://www.ergomedplc.com

Ergomed plc, together with its subsidiaries, provides clinical trial planning, management, and monitoring; and drug safety and medical information services in the United Kingdom, rest of Europe, the Middle East, Africa, North America, Asia, and Australia. It operates through two segments, Clinical Research Services and Pharmacovigilance. The company provides and manages clinical development, post-approval management, and pharmacovigilance services for pharmaceutical, biotechnology, and generics companies.

Ergomed Fundamentals Summary

How do Ergomed's earnings and revenue compare to its market cap?
ERGO fundamental statistics
Market Cap	UK£515.99m
Earnings (TTM)	UK£12.67m
Revenue (TTM)	UK£118.58m

41.4x

P/E Ratio

4.4x

P/S Ratio

Is ERGO overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
ERGO income statement (TTM)
Revenue	UK£118.58m
Cost of Revenue	UK£52.19m
Gross Profit	UK£66.39m
Other Expenses	UK£53.72m
Earnings	UK£12.67m

Last Reported Earnings

Dec 31, 2021

Next Earnings Date

n/a

Earnings per share (EPS)	0.26
Gross Margin	55.99%
Net Profit Margin	10.69%
Debt/Equity Ratio	0%

How did ERGO perform over the long term?

See historical performance and comparison

Valuation

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

Valuation Score

3/6

Valuation Score 3/6

Below Fair Value
Significantly Below Fair Value
PE vs Industry
PE vs Market
PEG Ratio
PB vs Industry

>50%

Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: ERGO (£10.6) is trading below our estimate of fair value (£24.17)

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

Price To Earnings Ratio

PE vs Industry: ERGO is good value based on its PE Ratio (41.4x) compared to the European Life Sciences industry average (45x).

PE vs Market: ERGO is poor value based on its PE Ratio (41.4x) compared to the UK market (15.3x).

Price to Earnings Growth Ratio

PEG Ratio: ERGO is poor value based on its PEG Ratio (2.8x)

Price to Book Ratio

PB vs Industry: ERGO is overvalued based on its PB Ratio (7.8x) compared to the GB Life Sciences industry average (3.2x).

Future Growth

How is Ergomed 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

14.8%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: ERGO's forecast earnings growth (14.8% per year) is above the savings rate (0.9%).

Earnings vs Market: ERGO's earnings (14.8% per year) are forecast to grow faster than the UK market (11.1% per year).

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

Revenue vs Market: ERGO's revenue (12.7% per year) is forecast to grow faster than the UK market (4% per year).

High Growth Revenue: ERGO's revenue (12.7% 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 ERGO's Return on Equity is forecast to be high in 3 years time

Past Performance

How has Ergomed 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

59.7%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: ERGO has a large one-off loss of £4.7M impacting its December 31 2021 financial results.

Growing Profit Margin: ERGO's current net profit margins (10.7%) are lower than last year (11.2%).

Past Earnings Growth Analysis

Earnings Trend: ERGO has become profitable over the past 5 years, growing earnings by 59.7% per year.

Accelerating Growth: ERGO's earnings growth over the past year (30.9%) is below its 5-year average (59.7% per year).

Earnings vs Industry: ERGO earnings growth over the past year (30.9%) underperformed the Life Sciences industry 50.8%.

Return on Equity

High ROE: ERGO's Return on Equity (18.8%) is considered low.

Financial Health

How is Ergomed'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: ERGO's short term assets (£60.3M) exceed its short term liabilities (£35.4M).

Long Term Liabilities: ERGO's short term assets (£60.3M) exceed its long term liabilities (£3.4M).

Debt to Equity History and Analysis

Debt Level: ERGO is debt free.

Reducing Debt: ERGO had no debt 5 years ago.

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

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

Balance Sheet

Dividend

What is Ergomed 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

0.018%

Forecast Dividend Yield

Dividend Yield vs Market

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

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

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

Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.

Cash Payout to Shareholders

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

Next Steps

Explore strong dividend paying companies in the Pharmaceuticals & Biotech industry.

Management

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

2.9yrs

Average management tenure

CEO

Ergomed has no CEO, or we have no data on them.

Leadership Team

Experienced Management: ERGO's management team is considered experienced (2.9 years average tenure).

Board Members

Experienced Board: ERGO's board of directors are not considered experienced ( 2 years average tenure), which suggests a new board.

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.

Data	Last Updated (UTC time)
Company Analysis	2022/05/17 00:00
End of Day Share Price	2022/05/17 00:00
Earnings	2021/12/31
Annual Earnings	2021/12/31