LSE:SPT

Stock Analysis Report

Spirent Communications

Executive Summary

Spirent Communications plc provides solutions to develop devices and equipment and to operate networks worldwide.

Snowflake

Fundamentals

Flawless balance sheet with solid track record.


Similar Companies

Share Price & News

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


Latest Share Price and Events


Market Performance


7 Day Return

0.5%

SPT

1.4%

GB Communications

1.9%

GB Market


1 Year Return

70.6%

SPT

37.0%

GB Communications

2.4%

GB Market

Return vs Industry: SPT exceeded the UK Communications industry which returned 37% over the past year.

Return vs Market: SPT exceeded the UK Market which returned 2.4% over the past year.


Shareholder returns

SPTIndustryMarket
7 Day0.5%1.4%1.9%
30 Day2.6%1.2%-1.1%
90 Day23.2%13.6%-1.8%
1 Year74.7%70.6%39.5%37.0%7.4%2.4%
3 Year170.0%142.4%55.0%46.0%18.2%3.7%
5 Year219.6%169.7%92.8%74.6%35.7%6.1%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

27.05x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Undervalued: SPT (£2) is trading above our estimate of fair value (£1.35)

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


Price To Earnings Ratio

PE vs Industry: SPT is poor value based on its PE Ratio (27.1x) compared to the Communications industry average (15.9x).

PE vs Market: SPT is poor value based on its PE Ratio (27.1x) compared to the UK market (16.5x).


Price to Earnings Growth Ratio

Low PEG Ratio: SPT is poor value based on its PEG Ratio (2.5x)


Price to Book Ratio

PB vs Industry: SPT is overvalued based on its PB Ratio (4.4x) compared to the GB Communications industry average (1.6x).


Next Steps

Future Growth

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

10.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SPT's forecast earnings growth (10.9% per year) is above the savings rate (1.2%).

Earnings vs Market: SPT's earnings (10.9% per year) are forecast to grow slower than the UK market (12.6% per year).

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

Revenue vs Market: SPT's revenue (6.3% per year) is forecast to grow faster than the UK market (3.9% per year).

High Growth Revenue: SPT's revenue (6.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: SPT's Return on Equity is forecast to be low in 3 years time (18.8%).


Next Steps

Past Performance

How has Spirent Communications performed over the past 5 years?

22.5%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: SPT's earnings have grown significantly by 22.5% per year over the past 5 years.

Accelerating Growth: SPT's earnings growth over the past year (79.8%) exceeds its 5-year average (22.5% per year).

Earnings vs Industry: SPT earnings growth over the past year (79.8%) exceeded the Communications industry 31.9%.


Return on Equity

High ROE: SPT's Return on Equity (16.4%) is considered low.


Return on Assets

ROA vs Industry: SPT has a higher Return on Assets than the Communications industry average last year.


Return on Capital Employed

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


Next Steps

Financial Health

How is Spirent Communications's financial position?


Financial Position Analysis

Short Term Liabilities: SPT's short term assets ($278.4M) exceeds its short term liabilities ($134.1M)

Long Term Liabilities: SPT's short term assets (278.4M) exceeds its long term liabilities (48.6M)


Debt to Equity History and Analysis

Debt Level: SPT is debt free.

Reducing Debt: SPT has not had any debt for past 5 years.

Debt Coverage: SPT has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: SPT has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet

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

Debt Coverage by Assets: Insufficient data to determine if SPT's debt is covered by short term assets.


Next Steps

  • Explore more healthy companies in the Tech industry.

Dividend

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

1.75%

Current Dividend Yield


Dividend Yield vs Market

company1.7%marketbottom25%2.0%markettop25%5.4%industryaverage2.8%forecastin3Years2.1%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: SPT's dividend (1.75%) isn’t notable compared to the bottom 25% of dividend payers in the UK market (2%).

High Dividend: SPT's dividend (1.75%) is low compared to the top 25% of dividend payers in the UK market (5.42%).

Stable Dividend: SPT's dividend payments have been volatile in the past 10 years.

Growing Dividend: SPT's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (49.2%), SPT's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SPT's dividends in 3 years are forecast to be well covered by earnings (43.7% payout ratio).


Next Steps

Management

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

4.0yrs

Average management tenure


CEO

Eric Updyke 0

0.4yrs

Tenure

0

Mr. Eric Updyke has been Chief Executive Officer and Director at Spirent Communications plc since May 1, 2019. He served on the Executive Management team of Amdocs reporting directly to the CEO. Mr. Updyke ...


Management Age and Tenure

4.0yrs

Average Tenure

Experienced Management: SPT's management team is considered experienced (4 years average tenure).


Board Age and Tenure

2.4yrs

Average Tenure

62yo

Average Age

Experienced Board: SPT's board of directors are not considered experienced ( 2.4 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

BuyUS$24926 Mar 19
Eric Hutchinson
EntityIndividual
Shares176
Max PriceUS$1.41
BuyUS$11426 Mar 19
Nigel Wright
EntityIndividual
Role
Senior Key Executive
Executive Vice President of Global Sales
Shares81
Max PriceUS$1.41
SellUS$98,66811 Mar 19
Nigel Wright
EntityIndividual
Role
Senior Key Executive
Executive Vice President of Global Sales
Shares64,333
Max PriceUS$1.53
SellUS$506,88811 Mar 19
Eric Hutchinson
EntityIndividual
Shares330,192
Max PriceUS$1.55

Ownership Breakdown


Management Team

  • R. Chenhall (66yo)

    Managing Director of PG Drives Technology

    • Tenure: 25.8yrs
  • Paula Bell (52yo)

    CFO & Executive Director

    • Tenure: 3.1yrs
    • Compensation: US$970.60k
  • Michelle Balch

    Deputy Company Secretary

    • Tenure: 0yrs
  • Nigel Wright

    Executive Vice President of Global Sales

    • Tenure: 0yrs
  • Angus Iveson

    Company Secretary & General Counsel

    • Tenure: 5yrs
  • Eric Updyke

    CEO & Director

    • Tenure: 0.4yrs

Board Members

  • Edgar Masri (62yo)

    Independent Non-Executive Director

    • Tenure: 1.8yrs
    • Compensation: US$48.70k
  • Jonathan Silver (62yo)

    Senior Independent Non-Executive Director

    • Tenure: 2.9yrs
    • Compensation: US$61.00k
  • Gary Bullard (62yo)

    Independent Non-Executive Director

    • Tenure: 2.8yrs
    • Compensation: US$59.00k
  • Wendy Koh

    Independent Non-Executive Director

    • Tenure: 1.8yrs
    • Compensation: US$48.70k
  • Bill Gennydd Thomas (59yo)

    Non-Executive Chairman

    • Tenure: 2.4yrs
    • Compensation: US$160.00k
  • Paula Bell (52yo)

    CFO & Executive Director

    • Tenure: 3.1yrs
    • Compensation: US$970.60k
  • Eric Updyke

    CEO & Director

    • Tenure: 0.4yrs

Company Information

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


Key Information

  • Name: Spirent Communications plc
  • Ticker: SPT
  • Exchange: LSE
  • Founded: 1936
  • Industry: Communications Equipment
  • Sector: Tech
  • Market Cap: UK£1.221b
  • Shares outstanding: 610.64m
  • Website: https://corporate.spirent.com

Number of Employees


Location

  • Spirent Communications plc
  • Northwood Park
  • Gatwick Road
  • Crawley
  • West Sussex
  • RH10 9XN
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SPNU.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1980
SPTLSE (London Stock Exchange)YesOrdinary SharesGBGBPJan 1980
BW8DB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1980
SPTLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJan 1980
SPMY.YOTCPK (Pink Sheets LLC)SPONS ADR NEWUSUSDJul 2001

Biography

Spirent Communications plc provides solutions to develop devices and equipment and to operate networks worldwide. The company operates through Networks & Security, Lifecycle Service Assurance, and Connecte ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/16 20:39
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.