LSE:SOPH

Stock Analysis Report

Executive Summary

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

Snowflake

Fundamentals

Reasonable 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


Market Performance


7 Day Return

33.0%

SOPH

4.1%

GB Software

-0.4%

GB Market


1 Year Return

18.2%

SOPH

6.6%

GB Software

2.9%

GB Market

Return vs Industry: SOPH exceeded the UK Software industry which returned 6.6% over the past year.

Return vs Market: SOPH exceeded the UK Market which returned 2.9% over the past year.


Shareholder returns

SOPHIndustryMarket
7 Day33.0%4.1%-0.4%
30 Day39.4%1.7%-1.4%
90 Day24.8%-8.4%-2.1%
1 Year19.5%18.2%12.7%6.6%7.9%2.9%
3 Year145.5%139.0%6.6%-11.0%18.0%3.6%
5 Yearn/a69.3%35.6%35.8%6.4%

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?

128.96x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Undervalued: SOPH (£5.66) is trading above our estimate of fair value (£3.96)

Significantly Undervalued: 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 (129x) compared to the Software industry average (27.9x).

PE vs Market: SOPH is poor value based on its PE Ratio (129x) compared to the UK market (16.7x).


Price to Earnings Growth Ratio

Low PEG Ratio: SOPH is poor value based on its PEG Ratio (6.5x)


Price to Book Ratio

PB vs Industry: SOPH is overvalued based on its PB Ratio (22.5x) 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 9 analysts?

19.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SOPH's forecast earnings growth (19.9% per year) is above the savings rate (1.2%).

Earnings vs Market: SOPH's earnings (19.9% per year) are forecast to grow faster than the UK market (12.6% per year).

High Growth Earnings: SOPH's earnings are forecast to grow, but not significantly.

Revenue vs Market: SOPH's revenue (7.2% per year) is forecast to grow faster than the UK market (3.9% per year).

High Growth Revenue: SOPH's revenue (7.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: SOPH's Return on Equity is forecast to be high in 3 years time (23.3%)


Next Steps

Past Performance

How has Sophos Group performed over the past 5 years?

32.2%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: SOPH has become profitable over the past 5 years, growing earnings by 32.2% 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 (7%).


Return on Equity

High ROE: SOPH's Return on Equity (17.3%) is considered low.


Return on Assets

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


Return on Capital Employed

ROCE Improving: SOPH has significantly improved its Return on Capital Employed over the past 3 years.


Next Steps

Financial Health

How is Sophos Group's financial position?


Financial Position Analysis

Short Term Liabilities: SOPH's short term assets ($383.6M) do not cover its short term liabilities ($571.7M)

Long Term Liabilities: SOPH's short term assets (383.6M) do not cover its long term liabilities (648.5M)


Debt to Equity History and Analysis

Debt Level: SOPH's debt to equity ratio (192.5%) 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 (47.7%).

Interest Coverage: SOPH's interest payments on its debt are well covered by EBIT (4.1x coverage).


Balance Sheet

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

Debt Coverage by Assets: SOPH's debt is covered by short term assets (assets are 1.279510x debt).


Next Steps

Dividend

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

0.71%

Current Dividend Yield


Dividend Yield vs Market

company0.7%marketbottom25%2.0%markettop25%5.4%industryaverage2.7%forecastin3Years0.8%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: SOPH's dividend (0.71%) isn’t notable compared to the bottom 25% of dividend payers in the UK market (2.01%).

High Dividend: SOPH's dividend (0.71%) is low compared to the top 25% of dividend payers in the UK market (5.36%).

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

Growing Dividend: SOPH 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: 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

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

6.2yrs

Average management tenure


CEO

Kris Hagerman (54yo)

7.8yrs

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 ($USD4.68M) is about average for companies of similar size in the UK market ($USD2.31M).

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


Management Age and Tenure

6.2yrs

Average Tenure

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


Board Age and Tenure

7.3yrs

Average Tenure

57.5yo

Average Age

Experienced Board: SOPH's board of directors are considered experienced (7.3 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.


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Ownership Breakdown


Management Team

  • Nick Bray (54yo)

    CFO & Executive Director

    • Tenure: 0yrs
    • Compensation: US$1.66m
  • Derek Brown

    Vice President of Investor Relations

    • Tenure: 0yrs
  • Kris Hagerman (54yo)

    CEO & Executive Director

    • Tenure: 7.8yrs
    • Compensation: US$4.68m
  • Jan Hruska

    Co-Founder & Special Advisor to the Board

    • Tenure: 0yrs
  • Peter Lammer

    Co-Founder & Special Advisor to the Board

    • Tenure: 34.8yrs
  • Joe Levy

    Chief Technology Officer

    • Tenure: 4.7yrs
  • Tony Young

    Chief Information Officer

    • Tenure: 3.2yrs
  • Eleanor Lacey

    Senior VP & Chief Legal Officer

    • Tenure: 2.9yrs
  • Matt Fairbanks

    Chief Marketing Officer

    • Tenure: 7.8yrs
  • Amanda Mallow

    Chief Human Resources Officer

    • Tenure: 0.9yrs

Board Members

  • Peter Gyenes (74yo)

    Non-Executive Chairman

    • Tenure: 13.8yrs
    • Compensation: US$255.00k
  • Nick Bray (54yo)

    CFO & Executive Director

    • Tenure: 0yrs
    • Compensation: US$1.66m
  • Kris Hagerman (54yo)

    CEO & Executive Director

    • Tenure: 7.8yrs
    • Compensation: US$4.68m
  • Vin Murria (56yo)

    Independent Non-Executive Director

    • Tenure: 2.8yrs
    • Compensation: US$150.00k
  • Paul Walker (62yo)

    Senior Independent Director

    • Tenure: 4.8yrs
    • Compensation: US$175.00k
  • Roy Mackenzie (48yo)

    Non-Executive Director

    • Tenure: 9.8yrs
  • Sandra Bergeron (60yo)

    Independent Non-Executive Director

    • Tenure: 9.8yrs
    • Compensation: US$150.00k
  • Rick Medlock (59yo)

    Independent Non-Executive Director

    • Tenure: 2.5yrs
    • Compensation: US$165.00k

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£2.762b
  • Shares outstanding: 488.15m
  • 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, explo ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/19 21:55
End of Day Share Price2019/10/18 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.