AIM:KWS

Stock Analysis Report

Executive Summary

Keywords Studios plc provides technical services to the video game industry in Ireland and internationally.

Snowflake

Fundamentals

Excellent balance sheet with reasonable growth potential.


Similar Companies

Share Price & News

How has Keywords Studios's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

0.8%

KWS

4.1%

GB IT

1.9%

GB Market


1 Year Return

-18.3%

KWS

8.0%

GB IT

2.4%

GB Market

Return vs Industry: KWS underperformed the UK IT industry which returned 8% over the past year.

Return vs Market: KWS underperformed the UK Market which returned 2.4% over the past year.


Shareholder returns

KWSIndustryMarket
7 Day0.8%4.1%1.9%
30 Day-13.2%-2.7%-1.1%
90 Day-26.7%-5.2%-1.8%
1 Year-18.2%-18.3%10.7%8.0%7.4%2.4%
3 Year163.6%162.7%65.7%53.6%18.2%3.7%
5 Year764.5%752.6%72.9%57.1%35.7%6.1%

Price Volatility Vs. Market

How volatile is Keywords Studios's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

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

88.73x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Undervalued: KWS (£12.15) is trading above our estimate of fair value (£8.04)

Significantly Undervalued: KWS is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: KWS is poor value based on its PE Ratio (88.7x) compared to the IT industry average (27.2x).

PE vs Market: KWS is poor value based on its PE Ratio (88.7x) compared to the UK market (16.5x).


Price to Earnings Growth Ratio

Low PEG Ratio: KWS is poor value based on its PEG Ratio (2.9x)


Price to Book Ratio

PB vs Industry: KWS is overvalued based on its PB Ratio (4.4x) compared to the GB IT industry average (2.5x).


Next Steps

Future Growth

How is Keywords Studios forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

30.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: KWS's forecast earnings growth (30.1% per year) is above the savings rate (1.2%).

Earnings vs Market: KWS's earnings (30.1% per year) are forecast to grow faster than the UK market (12.6% per year).

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

Revenue vs Market: KWS's revenue (10.5% per year) is forecast to grow faster than the UK market (3.9% per year).

High Growth Revenue: KWS's revenue (10.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: KWS's Return on Equity is forecast to be low in 3 years time (18.9%).


Next Steps

Past Performance

How has Keywords Studios performed over the past 5 years?

38.0%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: KWS's earnings have grown significantly by 38% per year over the past 5 years.

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

Earnings vs Industry: KWS had negative earnings growth (-10.7%) over the past year, making it difficult to compare to the IT industry average (4.2%).


Return on Equity

High ROE: KWS's Return on Equity (5%) is considered low.


Return on Assets

ROA vs Industry: KWS's Return on Assets is below or equal to the IT industry average last year.


Return on Capital Employed

ROCE Improving: KWS's Return on Capital Employed has declined over the past 3 years.


Next Steps

Financial Health

How is Keywords Studios's financial position?


Financial Position Analysis

Short Term Liabilities: KWS's short term assets (€118.1M) exceeds its short term liabilities (€117.8M)

Long Term Liabilities: KWS's short term assets (118.1M) exceeds its long term liabilities (23.8M)


Debt to Equity History and Analysis

Debt Level: KWS's debt to equity ratio (22.9%) is considered satisfactory

Reducing Debt: Insufficient data to determine if KWS's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: KWS's debt is well covered by operating cash flow (75.5%).

Interest Coverage: KWS's interest payments on its debt are well covered by EBIT (22.9x coverage).


Balance Sheet

Inventory Level: KWS has a low level of unsold assets or inventory.

Debt Coverage by Assets: KWS's debt is covered by short term assets (assets are 2.523820x debt).


Next Steps

Dividend

What is Keywords Studios's current dividend yield, its reliability and sustainability?

0.13%

Current Dividend Yield


Dividend Yield vs Market

company0.1%marketbottom25%2.0%markettop25%5.4%industryaverage2.5%forecastin3Years0.1%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: KWS's dividend (0.13%) isn’t notable compared to the bottom 25% of dividend payers in the UK market (2%).

High Dividend: KWS's dividend (0.13%) is low compared to the top 25% of dividend payers in the UK market (5.42%).

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

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


Current Payout to Shareholders

Dividend Coverage: KWS is not paying a notable dividend for the UK market.


Future Payout to Shareholders

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


Next Steps

Management

What is the CEO of Keywords Studios's salary, the management and board of directors tenure and is there insider trading?

1.3yrs

Average management tenure


CEO

Andrew Day (55yo)

10.5yrs

Tenure

€252,142

Compensation

Mr. Andrew John Day has been the Chief Executive Officer of Keywords Studios plc. since April 2009. Mr. Day has a background in technology, manufacturing and business services through corporate development ...


CEO Compensation Analysis

Compensation vs. Market: Andrew's total compensation ($USD278.95K) is below average for companies of similar size in the UK market ($USD1.18M).

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


Management Age and Tenure

1.3yrs

Average Tenure

45yo

Average Age

Experienced Management: KWS's management team is not considered experienced ( 1.3 years average tenure), which suggests a new team.


Board Age and Tenure

4.2yrs

Average Tenure

58.5yo

Average Age

Experienced Board: KWS's board of directors are considered experienced (4.2 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Sell€7,700,00002 May 19
P.E.Q. Holdings Ltd
EntityCompany
Shares500,000
Max Price€15.40
Buy€19,60024 Dec 18
Georges Fornay
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares2,000
Max Price€9.80

Ownership Breakdown


Management Team

  • Igor Efremov

    Chief Commercial Officer

    • Tenure: 1.3yrs
  • Andrew Day (55yo)

    Group CEO & Executive Director

    • Tenure: 10.5yrs
    • Compensation: €252.14k
  • Giacomo Duranti (45yo)

    Chief Operating Officer

    • Tenure: 12.8yrs
  • Liam O'Donoghue (37yo)

    Company Secretary

    • Tenure: 1.3yrs
  • David Broderick (45yo)

    Consultant

    • Tenure: 0yrs
    • Compensation: €180.54k
  • Michael Wallen

    Head of Global Business Development

    • Tenure: 0yrs
  • Andrew Brown

    Chief Marketing Officer

    • Tenure: 1.3yrs

Board Members

  • Ross Graham (71yo)

    Independent Non-Executive Chairman

    • Tenure: 6.3yrs
    • Compensation: €76.29k
  • David Reeves (72yo)

    Senior Independent Non-Executive Director

    • Tenure: 0yrs
    • Compensation: €68.30k
  • Georges Fornay (62yo)

    Independent Non-Executive Director

    • Tenure: 2.1yrs
    • Compensation: €55.30k
  • Andrew Day (55yo)

    Group CEO & Executive Director

    • Tenure: 10.5yrs
    • Compensation: €252.14k
  • Giorgio Guastalla (50yo)

    Non-Executive Director

    • Tenure: 10.8yrs
    • Compensation: €50.55k
  • Charlotta Ginman (54yo)

    Independent Non-Executive Director

    • Tenure: 2.1yrs
    • Compensation: €68.30k

Company Information

Keywords Studios plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Keywords Studios plc
  • Ticker: KWS
  • Exchange: AIM
  • Founded: 1998
  • Industry: IT Consulting and Other Services
  • Sector: Software
  • Market Cap: UK£781.411m
  • Shares outstanding: 64.45m
  • Website: https://www.keywordsstudios.com

Number of Employees


Location

  • Keywords Studios plc
  • Keywords Studios
  • South County Business Park
  • Dublin
  • Co. Dublin
  • 18
  • Ireland

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
KWSAIM (London Stock Exchange AIM Market)YesOrdinary SharesGBGBPJul 2013
KYYW.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJul 2013
KS3DB (Deutsche Boerse AG)YesOrdinary SharesDEEURJul 2013

Biography

Keywords Studios plc provides technical services to the video game industry in Ireland and internationally. It offers localization services related to translation and cultural adaptation of in-game text an ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/16 21:24
End of Day Share Price2019/10/16 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


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.