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GAMA

Gamma Communications AIM:GAMA Stock Report

Last Price

UK£11.34

Market Cap

UK£1.1b

7D

2.0%

1Y

-40.1%

Updated

17 May, 2022

Data

Company Financials +
GAMA fundamental analysis
Snowflake Score
Valuation2/6
Future Growth2/6
Past Performance3/6
Financial Health5/6
Dividends2/6

GAMA Stock Overview

Gamma Communications plc provides communications and software services for small, medium, and large sized business.

Rewards

Trading at 44.7% below our estimate of its fair value

Earnings are forecast to grow 6.72% per year

Risk Analysis

GAMA passed our risk checks.

Gamma Communications Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Gamma Communications
Historical stock prices
Current Share PriceUK£11.34
52 Week HighUK£23.50
52 Week LowUK£10.70
Beta0.91
1 Month Change-13.44%
3 Month Change-26.46%
1 Year Change-40.13%
3 Year Change0.35%
5 Year Change97.73%
Change since IPO453.17%

Recent News & Updates

May 04
Gamma Communications (LON:GAMA) Has Announced That It Will Be Increasing Its Dividend To UK£0.088

Gamma Communications (LON:GAMA) Has Announced That It Will Be Increasing Its Dividend To UK£0.088

Gamma Communications plc ( LON:GAMA ) will increase its dividend on the 23rd of June to UK£0.088. Even though the...

Apr 30
Should You Think About Buying Gamma Communications plc (LON:GAMA) Now?

Should You Think About Buying Gamma Communications plc (LON:GAMA) Now?

Gamma Communications plc ( LON:GAMA ), might not be a large cap stock, but it saw significant share price movement...

Apr 15
Gamma Communications (LON:GAMA) Has Announced That It Will Be Increasing Its Dividend To UK£0.088

Gamma Communications (LON:GAMA) Has Announced That It Will Be Increasing Its Dividend To UK£0.088

Gamma Communications plc ( LON:GAMA ) will increase its dividend on the 23rd of June to UK£0.088. This takes the annual...

Shareholder Returns

GAMAGB TelecomGB Market
7D2.0%4.2%3.1%
1Y-40.1%1.1%-3.2%

Return vs Industry: GAMA underperformed the UK Telecom industry which returned 1.1% over the past year.

Return vs Market: GAMA underperformed the UK Market which returned -3.2% over the past year.

Price Volatility

Is GAMA's price volatile compared to industry and market?
GAMA volatility
GAMA Average Weekly Movement6.1%
Telecom Industry Average Movement6.1%
Market Average Movement6.2%
10% most volatile stocks in GB Market11.8%
10% least volatile stocks in GB Market3.2%

Stable Share Price: GAMA is not significantly more volatile than the rest of UK stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: GAMA's weekly volatility (6%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
20011,745Andrew Taylorhttps://www.gammacommunicationsplc.com

Gamma Communications plc provides communications and software services for small, medium, and large sized business. It offers strategic services, such as collaboration, cloud PBX, SIP trunking, and inbound call control services; enabling services, including ethernet, broadband, network, and mobile; and traditional call and line services. The company offers its services through a network of channel partners, as well as directly to end users.

Gamma Communications Fundamentals Summary

How do Gamma Communications's earnings and revenue compare to its market cap?
GAMA fundamental statistics
Market CapUK£1.08b
Earnings (TTM)UK£53.60m
Revenue (TTM)UK£447.70m

20.4x

P/E Ratio

2.4x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
GAMA income statement (TTM)
RevenueUK£447.70m
Cost of RevenueUK£219.20m
Gross ProfitUK£228.50m
Other ExpensesUK£174.90m
EarningsUK£53.60m

Last Reported Earnings

Dec 31, 2021

Next Earnings Date

n/a

Earnings per share (EPS)0.56
Gross Margin51.04%
Net Profit Margin11.97%
Debt/Equity Ratio1.3%

How did GAMA perform over the long term?

See historical performance and comparison

Dividends

1.2%

Current Dividend Yield

24%

Payout Ratio

Does GAMA pay a reliable dividends?

See GAMA dividend history and benchmarks
When do you need to buy GAMA by to receive an upcoming dividend?
Gamma Communications dividend dates
Ex Dividend DateJun 01 2022
Dividend Pay DateJun 23 2022
Days until Ex dividend14 days
Days until Dividend pay date36 days

Does GAMA pay a reliable dividends?

See GAMA dividend history and benchmarks

Valuation

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

Valuation Score

2/6

Valuation Score 2/6

  • Below Fair Value

  • Significantly Below Fair Value

  • PE vs Industry

  • PE vs Market

  • PEG Ratio

  • PB vs Industry


44.7%

Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: GAMA (£11.34) is trading below our estimate of fair value (£20.51)

Significantly Below Fair Value: GAMA is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: GAMA is poor value based on its PE Ratio (20.4x) compared to the European Telecom industry average (15x).

PE vs Market: GAMA is poor value based on its PE Ratio (20.4x) compared to the UK market (15.3x).


Price to Earnings Growth Ratio

PEG Ratio: GAMA is poor value based on its PEG Ratio (3x)


Price to Book Ratio

PB vs Industry: GAMA is overvalued based on its PB Ratio (4.2x) compared to the GB Telecom industry average (2.7x).


Future Growth

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

Future Growth Score

2/6

Future Growth Score 2/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


6.7%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: GAMA's forecast earnings growth (6.7% per year) is above the savings rate (0.9%).

Earnings vs Market: GAMA's earnings (6.7% per year) are forecast to grow slower than the UK market (11.1% per year).

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

Revenue vs Market: GAMA's revenue (5.9% per year) is forecast to grow faster than the UK market (4% per year).

High Growth Revenue: GAMA's revenue (5.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: GAMA's Return on Equity is forecast to be low in 3 years time (19.8%).


Past Performance

How has Gamma Communications performed over the past 5 years?

Past Performance Score

3/6

Past Performance Score 3/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


27.2%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: GAMA has high quality earnings.

Growing Profit Margin: GAMA's current net profit margins (12%) are lower than last year (16.3%).


Past Earnings Growth Analysis

Earnings Trend: GAMA's earnings have grown significantly by 27.2% per year over the past 5 years.

Accelerating Growth: GAMA's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: GAMA had negative earnings growth (-16.5%) over the past year, making it difficult to compare to the Telecom industry average (17%).


Return on Equity

High ROE: GAMA's Return on Equity (21.2%) is considered high.


Financial Health

How is Gamma Communications's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: GAMA's short term assets (£164.2M) exceed its short term liabilities (£66.2M).

Long Term Liabilities: GAMA's short term assets (£164.2M) exceed its long term liabilities (£41.4M).


Debt to Equity History and Analysis

Debt Level: GAMA has more cash than its total debt.

Reducing Debt: Insufficient data to determine if GAMA's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: GAMA's debt is well covered by operating cash flow (2318.2%).

Interest Coverage: GAMA's interest payments on its debt are well covered by EBIT (113.8x coverage).


Balance Sheet


Dividend

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

Dividend Score

2/6

Dividend Score 2/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Future Dividend Coverage


1.16%

Current Dividend Yield

Upcoming Dividend Payment

TodayMay 17 2022Ex Dividend DateJun 01 2022Dividend Pay DateJun 23 202222 days from Ex DividendBuy in the next 14 days to receive the upcoming dividend

Dividend Yield vs Market

Notable Dividend: GAMA's dividend (1.16%) isn’t notable compared to the bottom 25% of dividend payers in the UK market (1.8%).

High Dividend: GAMA's dividend (1.16%) is low compared to the top 25% of dividend payers in the UK market (4.84%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, GAMA has been paying a dividend for less than 10 years.

Growing Dividend: GAMA's dividend payments have increased, but the company has only paid a dividend for 7 years.


Earnings Payout to Shareholders

Earnings Coverage: With its low payout ratio (23.6%), GAMA's dividend payments are well covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: With its low cash payout ratio (21.3%), GAMA's dividend payments are well covered by cash flows.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.5yrs

Average management tenure


CEO

Andrew Taylor (52 yo)

4yrs

Tenure

UK£2,882,000

Compensation

Mr. Andrew George Taylor has been an Independent Non-Executive Director at iomart Group plc since August 1, 2021. He has been a Chief Executive Officer of Gamma Communications plc since May 23, 2018 and ha...


CEO Compensation Analysis

Compensation vs Market: Andrew's total compensation ($USD3.59M) is above average for companies of similar size in the UK market ($USD1.85M).

Compensation vs Earnings: Andrew's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Leadership Team

Experienced Management: GAMA's management team is considered experienced (2.5 years average tenure).


Board Members

Experienced Board: GAMA's board of directors are considered experienced (5.8 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: GAMA insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

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


Top Shareholders

Company Information

Gamma Communications plc's employee growth, exchange listings and data sources


Key Information

  • Name: Gamma Communications plc
  • Ticker: GAMA
  • Exchange: AIM
  • Founded: 2001
  • Industry: Alternative Carriers
  • Sector: Telecom
  • Implied Market Cap: UK£1.083b
  • Shares outstanding: 96.35m
  • Website: https://www.gammacommunicationsplc.com

Number of Employees


Location

  • Gamma Communications plc
  • Kings House
  • Kings Road West
  • Newbury
  • Berkshire
  • RG14 5BY
  • United Kingdom

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/05/17 00:00
End of Day Share Price2022/05/17 00:00
Earnings2021/12/31
Annual Earnings2021/12/31


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.