AIM:TCM

Stock Analysis Report

Telit Communications

Executive Summary

Telit Communications PLC, together with its subsidiaries, provides a portfolio of integrated products and services to support and enable Internet of Things (IoT) deployments in the EMEA, the APAC, and the Americas.

Rewards

PE ratio (12.7x) is below the UK market (18.5x)

Became profitable this year

Risk Analysis

Earnings are forecast to decline by an average of -83.6% per year for the next 3 years

High level of non-cash earnings



Snowflake Analysis

Adequate balance sheet and slightly overvalued.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

2.3%

TCM

6.6%

GB Communications

0.3%

GB Market


1 Year Return

17.6%

TCM

41.6%

GB Communications

13.1%

GB Market

Return vs Industry: TCM underperformed the UK Communications industry which returned 44.8% over the past year.

Return vs Market: TCM exceeded the UK Market which returned 12.7% over the past year.


Shareholder returns

TCMIndustryMarket
7 Day2.3%6.6%0.3%
30 Day0%4.1%1.5%
90 Day-9.5%10.3%7.8%
1 Year17.6%17.6%44.3%41.6%19.1%13.1%
3 Year-42.2%-42.9%59.7%49.7%22.5%6.8%
5 Year-26.7%-29.5%95.3%75.9%41.2%8.5%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

12.74x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: TCM (£1.59) is trading above our estimate of fair value (£0.95)

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


Price To Earnings Ratio

PE vs Industry: TCM is good value based on its PE Ratio (12.7x) compared to the Communications industry average (16x).

PE vs Market: TCM is good value based on its PE Ratio (12.7x) compared to the UK market (18.5x).


Price to Earnings Growth Ratio

PEG Ratio: TCM's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: TCM is overvalued based on its PB Ratio (2.1x) compared to the GB Communications industry average (2x).


Next Steps

Future Growth

How is Telit Communications forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

-83.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TCM's earnings are forecast to decline over the next 3 years (-83.6% per year).

Earnings vs Market: TCM's earnings are forecast to decline over the next 3 years (-83.6% per year).

High Growth Earnings: TCM's earnings are forecast to decline over the next 3 years.

Revenue vs Market: TCM's revenue is expected to decline over the next 3 years (-0.05% per year).

High Growth Revenue: TCM's revenue is forecast to decline over the next 3 years (-0.05% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if TCM's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Telit Communications performed over the past 5 years?

-47.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: TCM has a high level of non-cash earnings.

Growing Profit Margin: TCM became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: TCM has become profitable over the past 5 years, growing earnings by -47.6% per year.

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

Earnings vs Industry: TCM has become profitable in the last year, making it difficult to compare its past year earnings growth to the Communications industry (34.1%).


Return on Equity

High ROE: TCM's Return on Equity (16.6%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Telit Communications's financial position?


Financial Position Analysis

Short Term Liabilities: TCM's short term assets ($215.3M) exceed its short term liabilities ($147.3M).

Long Term Liabilities: TCM's short term assets ($215.3M) exceed its long term liabilities ($37.1M).


Debt to Equity History and Analysis

Debt Level: TCM's debt to equity ratio (23.9%) is considered satisfactory.

Reducing Debt: TCM's debt to equity ratio has reduced from 36.6% to 23.9% over the past 5 years.

Debt Coverage: TCM's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: TCM's interest payments on its debt are not well covered by EBIT (0.4x coverage).


Balance Sheet

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

Debt Coverage by Assets: TCM's debt is covered by short term assets (assets are 7x debt).


Next Steps

Dividend

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


Dividend Yield vs Market

company0%marketbottom25%1.8%markettop25%5.0%industryaverage3.0%forecastin3Years0%

Current dividend yield vs market & industry

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

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

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


Current Payout to Shareholders

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


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of TCM'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 Telit Communications's salary, the management and board of directors tenure and is there insider trading?

1.1yrs

Average management tenure


CEO

Paolo Pino (57yo)

0.7yrs

Tenure

US$249,000

Compensation

Mr. Paolo Dal Pino has been Chief Executive Officer of Telit Communications PLC since May 22, 2019 and serves as its Director. He served as Executive Chairman at Telit Communications PLC from September 201 ...


CEO Compensation Analysis

Compensation vs Market: Paolo's total compensation ($USD249.00K) is below average for companies of similar size in the UK market ($USD596.47K).

Compensation vs Earnings: Insufficient data to compare Paolo's compensation with company performance.


Management Age and Tenure

1.1yrs

Average Tenure

55.5yo

Average Age

Experienced Management: TCM's management team is not considered experienced ( 1.1 years average tenure), which suggests a new team.


Board Age and Tenure

0.7yrs

Average Tenure

56yo

Average Age

Experienced Board: TCM's board of directors are not considered experienced ( 0.7 years average tenure), which suggests a new board.


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£461,50002 May 19
Harald Rösch
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares250,000
Max PriceUK£1.85

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Fred Yentz (54yo)

    President of Strategic Partnerships

    • Yossi Moscovitz (62yo)

      Chief Strategy Officer

      • Yariv Dafna (45yo)

        Finance Director

        • Tenure: 9.6yrs
        • Compensation: US$561.00k
      • Itzik Molcho

        Chief Operating Officer

        • Paolo Pino (57yo)

          CEO & Director

          • Tenure: 0.7yrs
          • Compensation: US$249.00k
        • Carlos Perez

          President of Sales

          • Tenure: 3.8yrs
        • Gideon Rogovsky

          Senior Vice President of Global Services Sales

          • Tenure: 4.1yrs
        • Tomer Lavie

          Senior Vice President of Sales for EMEA

          • Manish Watwani

            Chief Marketing & Product Officer

            • Tenure: 0.9yrs
          • Sharon Arad-Tzuk

            Vice President of Human Resource

            • Tenure: 1.3yrs

          Board Members

          • Simon Duffy (70yo)

            Independent Non-Executive Chairman of the Board

            • Tenure: 0.7yrs
            • Compensation: US$94.00k
          • Anthony Dixon (56yo)

            Independent Non-Executive Director

            • Tenure: 0.3yrs
          • Marco Emilio Patuano (55yo)

            Independent Non-Executive Director

            • Tenure: 0.5yrs
          • Harald Rösch (51yo)

            Independent Non-Executive Director

            • Tenure: 1.3yrs
            • Compensation: US$10.00k
          • Gil Sharon (56yo)

            Independent Senior Non-Executive Director

            • Tenure: 0.3yrs
            • Compensation: US$13.00k
          • Yariv Dafna (45yo)

            Finance Director

            • Tenure: 9.6yrs
            • Compensation: US$561.00k
          • Paolo Pino (57yo)

            CEO & Director

            • Tenure: 0.7yrs
            • Compensation: US$249.00k

          Company Information

          Telit Communications PLC's company bio, employee growth, exchange listings and data sources


          Key Information

          • Name: Telit Communications PLC
          • Ticker: TCM
          • Exchange: AIM
          • Founded: 2000
          • Industry: Communications Equipment
          • Sector: Tech
          • Market Cap: UK£212.306m
          • Shares outstanding: 132.69m
          • Website: https://www.telit.com

          Number of Employees


          Location

          • Telit Communications PLC
          • Cannon Place
          • 78 Cannon Street
          • London
          • Greater London
          • EC4N 6AF
          • United Kingdom

          Listings

          TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
          TCMAIM (London Stock Exchange AIM Market)YesOrdinary SharesGBGBPApr 2005
          TTCN.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDApr 2005
          TEFDB (Deutsche Boerse AG)YesOrdinary SharesDEEURApr 2005

          Biography

          Telit Communications PLC, together with its subsidiaries, provides a portfolio of integrated products and services to support and enable Internet of Things (IoT) deployments in the EMEA, the APAC, and the Americas. It operates in two segments, IoT Services and IoT Products. The company develops, markets, and sells cellular, global navigation satellite systems, short range wireless modules, IoT connectivity, and IoT platform services, as well as on-board edge devices to the IoT. It provides solutions and applications for deployment of IoT solutions with life cycle management in the traditional IoT verticals, such as asset tracking, logistics, remote industrial monitoring, automated utility meter reading, telematics, mobile health devices, and the fast-growing enterprise market. The company’s IoT portal delivers managed and value-added services; application enablement; and connectivity management in a platform-as-a-service model; and offers mobile data plans. It is also involved in the development, presales, marketing, and distribution of m2m wireless and other products; and provision of operational technology integration, professional, and solutions consulting services, as well as support and training services. The company sells its products and services directly, as well as through a network of distributors, solution providers, engineering/design firms, device manufacturers, and system integrators. It serves the automotive and transport, smart buildings, smart energy and utilities, smart cities/smart transportation, smart factory/industry, security and surveillance, healthcare, retail, and agriculture industries. The company was founded in 2000 and is headquartered in London, the United Kingdom. 


          Company Analysis and Financial Data Status

          All financial data provided by Standard & Poor's Capital IQ.
          DataLast Updated (UTC time)
          Company Analysis2020/01/17 20:46
          End of Day Share Price2020/01/17 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.