LSE:SOPH

Stock Analysis Report

Executive Summary

Sophos Group plc, through its subsidiaries, provides cloud-enabled end-user and network security solutions.


Snowflake Analysis

High growth potential with mediocre balance sheet.


Similar Companies

Share Price & News

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


Latest Share Price and Events

Stable Share Price: SOPH has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

2.0%

SOPH

9.1%

GB Software

8.6%

GB Market


1 Year Return

70.7%

SOPH

-12.2%

GB Software

-19.4%

GB Market

Return vs Industry: SOPH exceeded the UK Software industry which returned 0.2% over the past year.

Return vs Market: SOPH exceeded the UK Market which returned -5% over the past year.


Shareholder returns

SOPHIndustryMarket
7 Day2.0%9.1%8.6%
30 Day4.1%-2.5%-3.5%
90 Day3.9%-19.4%-23.0%
1 Year71.9%70.7%-7.0%-12.2%-15.5%-19.4%
3 Year115.0%110.2%-12.4%-26.1%-8.8%-19.9%
5 Yearn/a24.3%2.7%4.2%-19.0%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

433.04x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: SOPH (£5.8) is trading above our estimate of fair value (£3.83)

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


Price To Earnings Ratio

PE vs Industry: SOPH is poor value based on its PE Ratio (433x) compared to the Software industry average (30.3x).

PE vs Market: SOPH is poor value based on its PE Ratio (433x) compared to the UK market (16.4x).


Price to Earnings Growth Ratio

PEG Ratio: SOPH is poor value based on its PEG Ratio (11.4x)


Price to Book Ratio

PB vs Industry: SOPH is overvalued based on its PB Ratio (26.6x) compared to the GB Software industry average (3.1x).


Next Steps

Future Growth

How is Sophos Group forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

38.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SOPH's forecast earnings growth (38.1% per year) is above the savings rate (0.5%).

Earnings vs Market: SOPH's earnings (38.1% per year) are forecast to grow faster than the UK market (14.6% per year).

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

Revenue vs Market: SOPH's revenue (8.3% per year) is forecast to grow faster than the UK market (3.7% per year).

High Growth Revenue: SOPH's revenue (8.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SOPH's Return on Equity is forecast to be high in 3 years time (23.1%)


Next Steps

Past Performance

How has Sophos Group performed over the past 5 years?

44.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SOPH has a large one-off loss of $17.5M impacting its September 30 2019 financial results.

Growing Profit Margin: SOPH became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: SOPH has become profitable over the past 5 years, growing earnings by 44.2% per year.

Accelerating Growth: SOPH has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: SOPH has become profitable in the last year, making it difficult to compare its past year earnings growth to the Software industry (3.4%).


Return on Equity

High ROE: SOPH's Return on Equity (6.1%) is considered low.


Next Steps

Financial Health

How is Sophos Group's financial position?


Financial Position Analysis

Short Term Liabilities: SOPH's short term assets ($276.5M) do not cover its short term liabilities ($626.4M).

Long Term Liabilities: SOPH's short term assets ($276.5M) do not cover its long term liabilities ($548.6M).


Debt to Equity History and Analysis

Debt Level: SOPH's debt to equity ratio (118.6%) is considered high.

Reducing Debt: SOPH had negative shareholder equity 5 years ago, but is now positive and has therefore improved.

Debt Coverage: SOPH's debt is well covered by operating cash flow (96%).

Interest Coverage: SOPH's interest payments on its debt are well covered by EBIT (3.7x coverage).


Balance Sheet


Next Steps

Dividend

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

0.74%

Forecast Dividend Yield


Dividend Yield vs Market

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

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

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


Current Payout to Shareholders

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


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of SOPH'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?

5.1yrs

Average management tenure


CEO

Kris Hagerman (54yo)

8.17s

Tenure

US$4,683,000

Compensation

Mr. Kristof Hagerman, also known as Kris, has been the Chief Executive Officer of Sophos Group plc since joined it in 2012. Mr. Hagerman serves as the Chief Executive Officer of Sophos Holdings Limited. He ...


CEO Compensation Analysis

Compensation vs Market: Kris's total compensation ($USD4.68M) is above average for companies of similar size in the UK market ($USD2.39M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Kristof Hagerman
CEO & Executive Director8.17yrsUS$4.68m1.45% $43.2m
Jan Hruska
Co-Founder & Special Advisor to the Boardno datano datano data
Peter Lammer
Co-Founder & Special Advisor to the Board35.17yrsno datano data
Joe Levy
Chief Technology Officer5.08yrsno datano data
Tony Young
Chief Information Officer3.58yrsno datano data
Derek Brown
Vice President of Investor Relationsno datano datano data
Rashmi Garde
Chief Legal Officer0.17yrno datano data
Matt Fairbanks
Chief Marketing Officer8.17yrsno datano data
Amanda Mallow
Chief Human Resources Officer1.33yrsno datano data
Sunil Sharma
Managing Director of Salesno datano datano data

5.1yrs

Average Tenure

Experienced Management: SOPH's management team is seasoned and experienced (5.1 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Kristof Hagerman
CEO & Executive Director8.17yrsUS$4.68m1.45% $43.2m
Peter Gyenes
Non-Executive Chairman14.17yrsUS$255.00k0.056% $1.7m
Vinodka Murria
Independent Non-Executive Director3.17yrsUS$150.00k0.0097% $290.1k
Paul Walker
Senior Independent Director5.17yrsUS$175.00k0.037% $1.1m
Roy Mackenzie
Non-Executive Director10.17yrsno datano data
Sandra Bergeron
Independent Non-Executive Director10.17yrsUS$150.00k0.042% $1.2m
C. Richard Medlock
Independent Non-Executive Director2.92yrsUS$165.00k0.000080% $2.4k

7.7yrs

Average Tenure

59yo

Average Age

Experienced Board: SOPH's board of directors are considered experienced (7.7 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 3.5%.


Top Shareholders

Company Information

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


Key Information

  • Name: Sophos Group plc
  • Ticker: SOPH
  • Exchange: LSE
  • Founded: 1985
  • Industry: Systems Software
  • Sector: Software
  • Market Cap: UK£2.991b
  • Shares outstanding: 515.32m
  • Website: https://www.sophos.com

Number of Employees


Location

  • Sophos Group plc
  • The Pentagon
  • Abingdon Science Park
  • Abingdon
  • Oxfordshire
  • OX14 3YP
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SOPHLSE (London Stock Exchange)YesOrdinary SharesGBGBPJun 2015
SOPHlBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJun 2015
2SODB (Deutsche Boerse AG)YesOrdinary SharesDEEURJun 2015
SPHH.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJun 2015

Biography

Sophos Group plc, through its subsidiaries, provides cloud-enabled end-user and network security solutions. The company offers Intercept X, which delivers endpoint protection against unknown malware, exploits, and ransomware; XG Firewall, a next generation firewall that provides unprecedented visibility for networks, users, and applications directly from the control center; Sophos Central, a unified cloud administration console for managing various Sophos products; and Cloud Optix that offers artificial intelligence-based cloud security analytics, compliance, and DevSecOps platform to provide end-to-end protection in public cloud services. It also provides Sophos Wireless, a wireless access point; Sophos Email, an email security solution; Sophos Mobile, a unified endpoint management and mobile threat defense solution; UTM, a unified threat management solution; Phish Threat, a phishing simulation and engaging training solution; and Intercept X for Server, a next-generation server protection solution that provides security against cyber threats. In addition, the company offers SafeGuard Encryption solution; Secure Web Gateway for Web security; and Sophos Home for Mac and PC protection. It serves education, healthcare, retail, finance, and banking industries, as well as governments and public sectors in the Americas, Europe, the Middle East, Africa, the Asia Pacific, and Japan. The company has strategic alliance with Arcserve, LLC. Sophos Group plc was founded in 1985 and is headquartered in Abingdon, the United Kingdom. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/03 23:18
End of Day Share Price2020/03/02 00:00
Earnings2019/09/30
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.