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Market Cap

NZ$4.5b

Last Updated

2021/05/16 07:01 UTC

Data Sources

Company Financials +

Executive Summary

The a2 Milk Company Limited, together with its subsidiaries, sells A2 protein type branded milk and related products in Australia, New Zealand, China, other Asian countries, and the United States. More Details


Snowflake Analysis

Flawless balance sheet and undervalued.


Similar Companies

Share Price & News

How has a2 Milk's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: ATM is more volatile than 90% of NZ stocks over the past 3 months, typically moving +/- 8% a week.

Volatility Over Time: ATM's weekly volatility (8%) has been stable over the past year, but is still higher than 75% of NZ stocks.


Market Performance


7 Day Return

-20.6%

ATM

-9.6%

NZ Food

-2.6%

NZ Market


1 Year Return

-69.0%

ATM

-43.8%

NZ Food

15.6%

NZ Market

Return vs Industry: ATM underperformed the NZ Food industry which returned -43.8% over the past year.

Return vs Market: ATM underperformed the NZ Market which returned 15.7% over the past year.


Shareholder returns

ATMIndustryMarket
7 Day-20.6%-9.6%-2.6%
30 Day-31.7%-20.1%-3.1%
90 Day-42.8%-27.2%-1.9%
1 Year-69.0%-69.0%-43.3%-43.8%19.0%15.6%
3 Year-46.6%-46.6%-38.8%-41.0%40.2%23.6%
5 Year279.2%279.2%18.4%2.7%77.2%36.8%

Long-Term Price Volatility Vs. Market

How volatile is a2 Milk's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is a2 Milk undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: ATM (NZ$6.03) is trading below our estimate of fair value (NZ$23.32)

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


Price To Earnings Ratio

PE vs Industry: ATM is good value based on its PE Ratio (13.9x) compared to the NZ Food industry average (16.6x).

PE vs Market: ATM is good value based on its PE Ratio (13.9x) compared to the NZ market (23.9x).


Price to Earnings Growth Ratio

PEG Ratio: ATM is good value based on its PEG Ratio (0.7x)


Price to Book Ratio

PB vs Industry: ATM is overvalued based on its PB Ratio (3.8x) compared to the NZ Food industry average (1x).


Future Growth

How is a2 Milk forecast to perform in the next 1 to 3 years based on estimates from 14 analysts?

21.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ATM's forecast earnings growth (21.2% per year) is above the savings rate (2.1%).

Earnings vs Market: ATM's earnings (21.2% per year) are forecast to grow faster than the NZ market (7.5% per year).

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

Revenue vs Market: ATM's revenue (11.7% per year) is forecast to grow faster than the NZ market (6.2% per year).

High Growth Revenue: ATM's revenue (11.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ATM's Return on Equity is forecast to be low in 3 years time (19.3%).


Past Performance

How has a2 Milk performed over the past 5 years?

41.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ATM has high quality earnings.

Growing Profit Margin: ATM's current net profit margins (20%) are lower than last year (21.9%).


Past Earnings Growth Analysis

Earnings Trend: ATM's earnings have grown significantly by 41.6% per year over the past 5 years.

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

Earnings vs Industry: ATM had negative earnings growth (-2.5%) over the past year, making it difficult to compare to the Food industry average (1.2%).


Return on Equity

High ROE: ATM's Return on Equity (27%) is considered high.


Financial Health

How is a2 Milk's financial position?


Financial Position Analysis

Short Term Liabilities: ATM's short term assets (NZ$1.1B) exceed its short term liabilities (NZ$198.6M).

Long Term Liabilities: ATM's short term assets (NZ$1.1B) exceed its long term liabilities (NZ$14.4M).


Debt to Equity History and Analysis

Debt Level: ATM is debt free.

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

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

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


Balance Sheet


Dividend

What is a2 Milk current dividend yield, its reliability and sustainability?

0.85%

Forecast Dividend Yield


Dividend Yield vs Market

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

High Dividend: Unable to evaluate ATM's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if ATM's dividends per share have been stable in the past.

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


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of ATM's dividend in 3 years as they are not forecast to pay a notable one for the NZ market.


Next Steps

Management

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

3.3yrs

Average management tenure


CEO

David Bortolussi (51 yo)

0.25

Tenure

Mr. David L. Bortolussi, BComm, FFin, FCA, served as Group President of Innerwear International at Hanesbrands Inc. since April 2019 until February 6, 2021. He serves as Managing Director and Chief Executi...


Leadership Team

Experienced Management: ATM's management team is considered experienced (3.3 years average tenure).


Board Members

Experienced Board: ATM's board of directors are considered experienced (3.3 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 not been meaningfully diluted in the past year.


Top Shareholders

Company Information

The a2 Milk Company Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: The a2 Milk Company Limited
  • Ticker: ATM
  • Exchange: NZSE
  • Founded: 2000
  • Industry: Packaged Foods and Meats
  • Sector: Food, Beverage & Tobacco
  • Market Cap: NZ$4.483b
  • Shares outstanding: 743.41m
  • Website: https://www.thea2milkcompany.com

Number of Employees


Location

  • The a2 Milk Company Limited
  • 51 Shortland Street
  • Level 10
  • Auckland
  • 1010
  • New Zealand

Listings


Biography

The a2 Milk Company Limited, together with its subsidiaries, sells A2 protein type branded milk and related products in Australia, New Zealand, China, other Asian countries, and the United States. The comp...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/05/16 07:01
End of Day Share Price2021/05/14 00:00
Earnings2020/12/31
Annual Earnings2020/06/30


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.