LSE:SDL

Stock Analysis Report

Executive Summary

SDL plc provides content management and language translation services.

Snowflake

Fundamentals

Flawless balance sheet with reasonable growth potential.


Similar Companies

Share Price & News

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


Latest Share Price and Events


Market Performance


7 Day Return

-1.2%

SDL

5.4%

GB Software

2.3%

GB Market


1 Year Return

11.5%

SDL

3.9%

GB Software

2.5%

GB Market

Return vs Industry: SDL exceeded the UK Software industry which returned 3.9% over the past year.

Return vs Market: SDL exceeded the UK Market which returned 2.5% over the past year.


Shareholder returns

SDLIndustryMarket
7 Day-1.2%5.4%2.3%
30 Day4.9%4.1%-1.3%
90 Day8.2%-9.9%-1.9%
1 Year13.1%11.5%10.0%3.9%7.4%2.5%
3 Year21.5%16.9%4.4%-12.5%18.8%4.3%
5 Year67.7%59.3%73.4%38.7%36.4%6.8%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

4.9%

Undervalued compared to fair value


Share Price vs. Fair Value

Undervalued: SDL (£5.12) is trading below our estimate of fair value (£5.38)

Significantly Undervalued: SDL is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: SDL is good value based on its PE Ratio (26.9x) compared to the Software industry average (29.7x).

PE vs Market: SDL is poor value based on its PE Ratio (26.9x) compared to the UK market (16.4x).


Price to Earnings Growth Ratio

Low PEG Ratio: SDL is poor value based on its PEG Ratio (1.3x)


Price to Book Ratio

PB vs Industry: SDL is good value based on its PB Ratio (1.9x) compared to the GB Software industry average (3x).


Next Steps

Future Growth

How is SDL forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

21.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SDL's forecast earnings growth (21.2% per year) is above the savings rate (1.2%).

Earnings vs Market: SDL's earnings (21.2% per year) are forecast to grow faster than the UK market (12.4% per year).

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

Revenue vs Market: SDL's revenue (4.9% per year) is forecast to grow faster than the UK market (4.1% per year).

High Growth Revenue: SDL's revenue (4.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: SDL's Return on Equity is forecast to be low in 3 years time (11.4%).


Next Steps

Past Performance

How has SDL performed over the past 5 years?

48.2%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: SDL has become profitable over the past 5 years, growing earnings by 48.2% per year.

Accelerating Growth: SDL's earnings growth over the past year (1.2%) is below its 5-year average (48.2% per year).

Earnings vs Industry: SDL earnings growth over the past year (1.2%) underperformed the Software industry 7%.


Return on Equity

High ROE: SDL's Return on Equity (7%) is considered low.


Return on Assets

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


Return on Capital Employed

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


Next Steps

Financial Health

How is SDL's financial position?


Financial Position Analysis

Short Term Liabilities: SDL's short term assets (£139.7M) exceeds its short term liabilities (£114.2M)

Long Term Liabilities: SDL's short term assets (139.7M) exceeds its long term liabilities (41.2M)


Debt to Equity History and Analysis

Debt Level: SDL's debt to equity ratio (4.9%) is considered satisfactory

Reducing Debt: SDL's debt to equity ratio has reduced from 7.4% to 4.9% over the past 5 years.

Debt Coverage: SDL's debt is well covered by operating cash flow (228.3%).

Interest Coverage: SDL's interest payments on its debt are well covered by EBIT (20.8x coverage).


Balance Sheet

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

Debt Coverage by Assets: SDL's debt is covered by short term assets (assets are 11.641660x debt).


Next Steps

Dividend

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

1.37%

Current Dividend Yield


Dividend Yield vs Market

company1.4%marketbottom25%2.0%markettop25%5.4%industryaverage2.7%forecastin3Years1.5%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: SDL's dividend (1.37%) isn’t notable compared to the bottom 25% of dividend payers in the UK market (2%).

High Dividend: SDL's dividend (1.37%) is low compared to the top 25% of dividend payers in the UK market (5.44%).

Stable Dividend: SDL has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: SDL's dividend payments have increased, but the company has only paid a dividend for 9 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (36.8%), SDL's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SDL's dividends in 3 years are forecast to be well covered by earnings (23.1% payout ratio).


Next Steps

Management

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

3.2yrs

Average management tenure


CEO

Adolfo Hernandez 0

3.5yrs

Tenure

UK£1,497,500

Compensation

Mr. Adolfo Hernandez has been the Chief Executive Officer of SDL plc since April 18, 2016. Mr. Hernandez served as Chief Executive Officer of Acision Limited from July 2013 to August 2015. Mr. Hernandez se ...


CEO Compensation Analysis

Compensation vs. Market: Adolfo's total compensation ($USD1.91M) is about average for companies of similar size in the UK market ($USD870.09K).

Compensation vs Earnings: Adolfo's compensation has increased by more than 20% in the past year.


Management Age and Tenure

3.2yrs

Average Tenure

Experienced Management: SDL's management team is considered experienced (3.2 years average tenure).


Board Age and Tenure

5.5yrs

Average Tenure

62yo

Average Age

Experienced Board: SDL's board of directors are considered experienced (5.5 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

BuyUK£55,14026 Mar 19
Adolfo Hernandez
EntityIndividual
Role
Chief Executive Officer
CEO & Director
Shares10,000
Max PriceUK£5.51

Ownership Breakdown


Management Team

  • Kathleen Bostick

    Executive Vice President of North America

    • Tenure: 5.8yrs
  • Adolfo Hernandez

    CEO & Director

    • Tenure: 3.5yrs
    • Compensation: UK£1.50m
  • Thomas Labarthe

    Chief Revenue Officer

    • Tenure: 1.8yrs
  • Roddy Temperley

    Chief Human Resources Officer

    • Tenure: 3.2yrs
  • Kaarin Gordon

    Senior Vice President of Life Sciences

    • Tenure: 0yrs
  • Azad Ootam

    Chief Transformation Officer

    • Tenure: 3.3yrs
  • Peggy Chen

    Chief Marketing Officer

    • Tenure: 3.2yrs
  • Betsy Fallon

    Executive Vice President of Global Client Services & Professional Services

    • Tenure: 3.2yrs
  • Massimo Ghislandi

    Executive Vice President of Translation Productivity

    • Tenure: 3.2yrs
  • Xenia Walters

    CFO & Director

    • Tenure: 0yrs
    • Compensation: UK£582.80k

Board Members

  • Alan McWalter (65yo)

    Senior Independent Director

    • Tenure: 5.6yrs
    • Compensation: UK£58.00k
  • Chris Humphrey (62yo)

    Independent Non-Executive Director

    • Tenure: 3.3yrs
    • Compensation: UK£50.00k
  • Mandy Gradden (51yo)

    Independent Non-Executive Director

    • Tenure: 7.8yrs
    • Compensation: UK£55.00k
  • David Clayton (62yo)

    Non Executive Chairman

    • Tenure: 6.3yrs
    • Compensation: UK£110.00k
  • Glenn Collinson (56yo)

    Independent Non-Executive Director

    • Tenure: 5.3yrs
    • Compensation: UK£58.00k
  • Adolfo Hernandez

    CEO & Director

    • Tenure: 3.5yrs
    • Compensation: UK£1.50m
  • Xenia Walters

    CFO & Director

    • Tenure: 0yrs
    • Compensation: UK£582.80k

Company Information

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


Key Information

  • Name: SDL plc
  • Ticker: SDL
  • Exchange: LSE
  • Founded: 1992
  • Industry: Application Software
  • Sector: Software
  • Market Cap: UK£464.790m
  • Shares outstanding: 90.78m
  • Website: https://www.sdl.com

Number of Employees


Location

  • SDL plc
  • New Globe House
  • Vanwall Business Park
  • Maidenhead
  • Berkshire
  • SL6 4UB
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SDLL.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDDec 1999
SDLLSE (London Stock Exchange)YesOrdinary SharesGBGBPDec 1999
YDLDB (Deutsche Boerse AG)YesOrdinary SharesDEEURDec 1999
SDLLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPDec 1999

Biography

SDL plc provides content management and language translation services. It operates through Language Services, Language Technologies, and Content Technologies segments. Its products include SDL Tridion Site ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/15 20:32
End of Day Share Price2019/10/15 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.