AIM:G4M

Stock Analysis Report

Gear4music (Holdings)

Executive Summary

Gear4music (Holdings) plc engages in the retail of musical instruments and equipment in Europe and internationally.


Snowflake Analysis

Reasonable growth potential with mediocre balance sheet.

Share Price & News

How has Gear4music (Holdings)'s share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: G4M's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

15.5%

G4M

-0.7%

GB Specialty Retail

0.3%

GB Market


1 Year Return

55.6%

G4M

23.1%

GB Specialty Retail

6.5%

GB Market

Return vs Industry: G4M exceeded the UK Specialty Retail industry which returned 23.1% over the past year.

Return vs Market: G4M exceeded the UK Market which returned 6.5% over the past year.


Shareholder returns

G4MIndustryMarket
7 Day15.5%-0.7%0.3%
30 Day2.8%1.5%-0.5%
90 Day38.3%12.5%3.8%
1 Year55.6%55.6%27.3%23.1%12.0%6.5%
3 Year-57.8%-57.8%19.9%8.1%18.7%3.8%
5 Yearn/a15.5%-2.8%35.0%4.1%

Price Volatility Vs. Market

How volatile is Gear4music (Holdings)'s share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Gear4music (Holdings) undervalued compared to its fair value and its price relative to the market?

3.14x

Price to Book (PB) ratio


Share Price vs. Fair Value

Below Fair Value: G4M (£2.8) is trading above our estimate of fair value (£2.01)

Significantly Below Fair Value: G4M is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: G4M is unprofitable, so we can't compare its PE Ratio to the Specialty Retail industry average.

PE vs Market: G4M is unprofitable, so we can't compare its PE Ratio to the UK market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate G4M's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: G4M is overvalued based on its PB Ratio (3.1x) compared to the GB Specialty Retail industry average (1.2x).


Next Steps

Future Growth

How is Gear4music (Holdings) forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

74.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: G4M is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (0.5%).

Earnings vs Market: G4M is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: G4M's is expected to become profitable in the next 3 years.

Revenue vs Market: G4M's revenue (13.7% per year) is forecast to grow faster than the UK market (3.6% per year).

High Growth Revenue: G4M's revenue (13.7% 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 G4M's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Gear4music (Holdings) performed over the past 5 years?

39.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: G4M is currently unprofitable.

Growing Profit Margin: G4M is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: G4M is unprofitable, but has reduced losses over the past 5 years at a rate of 39.5% per year.

Accelerating Growth: Unable to compare G4M's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: G4M is unprofitable, making it difficult to compare its past year earnings growth to the Specialty Retail industry (2.5%).


Return on Equity

High ROE: G4M has a negative Return on Equity (-0.8%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Gear4music (Holdings)'s financial position?


Financial Position Analysis

Short Term Liabilities: G4M's short term assets (£25.6M) exceed its short term liabilities (£20.1M).

Long Term Liabilities: G4M's short term assets (£25.6M) exceed its long term liabilities (£5.4M).


Debt to Equity History and Analysis

Debt Level: G4M's debt to equity ratio (66.1%) is considered high.

Reducing Debt: G4M's debt to equity ratio has reduced from 1536% to 66.1% over the past 5 years.


Balance Sheet

Inventory Level: G4M has a high level of physical assets or inventory.

Debt Coverage by Assets: G4M's debt is covered by short term assets (assets are 2.1x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: G4M has been profitable on average in the past, therefore cash runway is not a concern.

Forecast Cash Runway: Insufficient data to determine if G4M has enough cash runway if its free cash flow continues to grow or shrink based on historical rates.


Next Steps

Dividend

What is Gear4music (Holdings)'s current dividend yield, its reliability and sustainability?

0.051%

Forecast Dividend Yield


Dividend Yield vs Market

Notable Dividend: Unable to evaluate G4M's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate G4M's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if G4M's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if G4M's dividend payments have been increasing.


Current Payout to Shareholders

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


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of G4M's dividend in 3 years as they are not forecast to pay a notable one for the UK market.


Next Steps

Management

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

UK£239k

CEO Compensation


CEO

Andrew Wass (48yo)

UK£238,525

Compensation

Mr. Andrew Paul Wass Founded Gear4music Limited (also known as Soundpro Limited) in 1995. Mr. Wass serves as the Chief Executive Officer and Executive Director of Gear4Music (Holdings) Plc. Mr. Wass has ov ...


CEO Compensation Analysis

Compensation vs Market: Andrew's total compensation ($USD309.27K) is about average for companies of similar size in the UK market ($USD324.14K).

Compensation vs Earnings: Andrew's compensation has increased whilst the company is unprofitable.


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

Gear4music (Holdings) plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Gear4music (Holdings) plc
  • Ticker: G4M
  • Exchange: AIM
  • Founded: 1995
  • Industry: Specialty Stores
  • Sector: Retail
  • Market Cap: UK£58.647m
  • Shares outstanding: 20.95m
  • Website: https://www.gear4music.com

Number of Employees


Location

  • Gear4music (Holdings) plc
  • Holgate Park Drive
  • York
  • North Yorkshire
  • YO26 4GN
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
G4MAIM (London Stock Exchange AIM Market)YesOrdinary SharesGBGBPJun 2015

Biography

Gear4music (Holdings) plc engages in the retail of musical instruments and equipment in Europe and internationally. It offers electric, acoustic, and bass guitars; guitar amplifiers and effects pedals; drums and percussion products, including electronic drums; drum pads, hybrid drumming products, acoustic drum kits, individual drums, cymbals, snare drums, drum hardware products, drum accessories, and various percussion products; and pianos and keyboards, such as digital, stage, and grand pianos, as well as MIDI keyboards, synth key products, and accessories. It also provides orchestral products, such as woodwind and string instruments, electric strings, brass instruments, and percussion products, as well as woodwind, string, and brass accessories. In addition, it offers live sound and lighting products comprising PA systems and speakers, signal processors, microphones, wireless systems, in-ear monitors, PA mixers, headphones, DI boxes, audio recorders, live sound accessories, staging and trussing products, stage lightings and accessories, lighting controllers and effects, and effects machines; and studio and production recording equipment, such as audio interfaces and mixers, studio outboards and monitors, audio computers, studio headphones, controllers, music software, microphones, synthesizers, modular synths, sequencers, samplers, drum machines, and studio and synth accessories. Further, it provides DJ decks, mixers, effects units, controllers, headphones, and furniture, as well as scratch and mobile DJ products, and vinyl accessories; and home audio products comprising headphones, portable audio and hi-fi products, and cinema products. It serves private individuals and professional musicians under various brand names through 20 Gear4music branded Websites; and showrooms in York, Sweden, and Germany. The company was founded in 1995 and is headquartered in York, the United Kingdom. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/22 23:00
End of Day Share Price2020/02/21 00:00
Earnings2019/03/31
Annual Earnings2019/03/31


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.