GB Group (AIM:GBG) - Share price, News & Analysis

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

GBG Stock Overview

GB Group plc, together with its subsidiaries, provides identity data intelligence products and services in the United Kingdom, the United States, Australia, and internationally.

Rewards

Trading at 30.2% below our estimate of its fair value

Earnings are forecast to grow 31.44% per year

Risk Analysis

Volatile share price over the past 3 months

Profit margins (6.3%) are lower than last year (12.3%)

Shareholders have been diluted in the past year

GB Group Competitors

Price History & Performance

Summary of all time highs, changes and price drops for GB Group
Historical stock prices
Current Share Price	UK£4.45
52 Week High	UK£9.76
52 Week Low	UK£4.05
Beta	0.58
1 Month Change	-18.87%
3 Month Change	-19.89%
1 Year Change	-47.02%
3 Year Change	-19.53%
5 Year Change	27.97%
Change since IPO	104.13%

Recent News & Updates

Jun 18

Here's Why GB Group (LON:GBG) Can Manage Its Debt Responsibly

The external fund manager backed by Berkshire Hathaway's Charlie Munger, Li Lu, makes no bones about it when he says...

Shareholder Returns

	GBG	GB Software	GB Market
7D	0.9%	3.7%	-0.3%
1Y	-47.0%	-22.7%	-10.4%

Return vs Industry: GBG underperformed the UK Software industry which returned -22.7% over the past year.

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

Price Volatility

Is GBG's price volatile compared to industry and market?
GBG volatility
GBG Average Weekly Movement	8.0%
Software Industry Average Movement	5.4%
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: GBG is more volatile than 75% of UK stocks over the past 3 months, typically moving +/- 8% a week.

Volatility Over Time: GBG's weekly volatility (8%) has been stable over the past year, but is still higher than 75% of UK stocks.

About the Company

Founded	Employees	CEO	Website
1989	1,276	Chris Clark	https://www.gbgplc.com

GB Group plc, together with its subsidiaries, provides identity data intelligence products and services in the United Kingdom, the United States, Australia, and internationally. The company operates through three segments: Location, Identity, and Fraud. Its solutions help organizations recognize and verify identities of their customers in their business processes.

GB Group Fundamentals Summary

How do GB Group's earnings and revenue compare to its market cap?
GBG fundamental statistics
Market Cap	UK£1.09b
Earnings (TTM)	UK£15.26m
Revenue (TTM)	UK£242.48m

73.4x

P/E Ratio

4.6x

P/S Ratio

Is GBG overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
GBG income statement (TTM)
Revenue	UK£242.48m
Cost of Revenue	UK£70.55m
Gross Profit	UK£171.93m
Other Expenses	UK£156.67m
Earnings	UK£15.26m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	0.061
Gross Margin	70.91%
Net Profit Margin	6.29%
Debt/Equity Ratio	16.3%

How did GBG perform over the long term?

See historical performance and comparison

Dividends

0.9%

Current Dividend Yield

54%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is GBG 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 GBG?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for GBG. This is calculated by dividing GBG's market cap by their current preferred multiple.
What is GBG's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	UK£1.09b

GBG 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	5x
Enterprise Value/EBITDA	22.1x
PEG Ratio	2.3x

Price to Earnings Ratio vs Peers

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

GBG PE Ratio vs Peers

The above table shows the PE ratio for GBG vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	51.9x

Forward PE

Price-To-Earnings vs Peers: GBG is expensive based on its Price-To-Earnings Ratio (73.4x) compared to the peer average (51.9x).

Price to Earnings Ratio vs Industry

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

Price-To-Earnings vs Industry: GBG is expensive based on its Price-To-Earnings Ratio (73.4x) compared to the UK Software industry average (41.4x)

Price to Earnings Ratio vs Fair Ratio

What is GBG'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.

GBG PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	73.4x
Fair PE Ratio	43x

Price-To-Earnings vs Fair Ratio: GBG is expensive based on its Price-To-Earnings Ratio (73.4x) compared to the estimated Fair Price-To-Earnings Ratio (43x).

Share Price vs Fair Value

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

Below Fair Value: GBG (£4.45) is trading below our estimate of fair value (£6.37)

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

Price to Earnings Growth Ratio

PEG Ratio: GBG is poor value based on its PEG Ratio (2.3x)

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Future Growth

How is GB Group forecast to perform in the next 1 to 3 years based on estimates from 9 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

31.4%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: GBG's forecast earnings growth (31.4% per year) is above the savings rate (0.9%).

Earnings vs Market: GBG's earnings (31.4% per year) are forecast to grow faster than the UK market (10.9% per year).

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

Revenue vs Market: GBG's revenue (13.8% per year) is forecast to grow faster than the UK market (4.1% per year).

High Growth Revenue: GBG's revenue (13.8% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: GBG's Return on Equity is forecast to be low in 3 years time (7.8%).

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Past Performance

How has GB Group performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

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

19.0%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: GBG has high quality earnings.

Growing Profit Margin: GBG's current net profit margins (6.3%) are lower than last year (12.3%).

Past Earnings Growth Analysis

Earnings Trend: GBG's earnings have grown by 19% per year over the past 5 years.

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

Earnings vs Industry: GBG had negative earnings growth (-43.2%) over the past year, making it difficult to compare to the Software industry average (-14.3%).

Return on Equity

High ROE: GBG's Return on Equity (1.9%) is considered low.

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Financial Health

How is GB 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: GBG's short term assets (£101.0M) do not cover its short term liabilities (£115.8M).

Long Term Liabilities: GBG's short term assets (£101.0M) do not cover its long term liabilities (£199.2M).

Debt to Equity History and Analysis

Debt Level: GBG's net debt to equity ratio (13.5%) is considered satisfactory.

Reducing Debt: GBG's debt to equity ratio has increased from 13.1% to 16.3% over the past 5 years.

Debt Coverage: GBG's debt is well covered by operating cash flow (34.8%).

Interest Coverage: GBG's interest payments on its debt are well covered by EBIT (15.9x coverage).

Balance Sheet

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Dividend

What is GB 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

0.86%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: GBG's dividend (0.86%) isn’t notable compared to the bottom 25% of dividend payers in the UK market (1.92%).

High Dividend: GBG's dividend (0.86%) is low compared to the top 25% of dividend payers in the UK market (5.23%).

Stability and Growth of Payments

Stable Dividend: GBG is not paying a notable dividend for the UK market, therefore no need to check if payments are stable.

Growing Dividend: GBG is not paying a notable dividend for the UK market, therefore no need to check if payments are increasing.

Earnings Payout to Shareholders

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

Cash Payout to Shareholders

Cash Flow Coverage: GBG is not paying a notable dividend for the UK market.

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Management

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

6.2yrs

Average management tenure

CEO

Chris Clark (52 yo)

5.17yrs

Tenure

UK£1,329,000

Compensation

Mr. Christopher Graham Clark, also known as Chris, has been the Chief Executive Officer of GB Group plc since April 1, 2017. Mr. Clark served as Managing Director of UK, Ireland & EMEA at Experian plc unti...

CEO Compensation Analysis

Compensation vs Market: Chris's total compensation ($USD1.63M) is about average for companies of similar size in the UK market ($USD2.07M).

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

Leadership Team

Experienced Management: GBG's management team is seasoned and experienced (6.2 years average tenure).

Board Members

Experienced Board: GBG's board of directors are considered experienced (4.8 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 28.3%.

Data	Last Updated (UTC time)
Company Analysis	2022/06/24 00:00
End of Day Share Price	2022/06/24 00:00
Earnings	2022/03/31
Annual Earnings	2022/03/31