NZSE:NZM

Stock Analysis Report

Executive Summary

NZME Limited, together with its subsidiaries, operates as an integrated media and entertainment company in New Zealand.

Rewards

Trading at 72.4% below its fair value

Earnings are forecast to grow 9.61% per year

Risk Analysis

Large one-off items impacting financial results

Profit margins (2.4%) are lower than last year (4.3%)

Does not have a meaningful market cap (NZ$81M)



Snowflake Analysis

Very undervalued with adequate balance sheet.

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

-4.7%

NZM

1.5%

NZ Media

-0.2%

NZ Market


1 Year Return

-18.0%

NZM

-14.2%

NZ Media

21.1%

NZ Market

Return vs Industry: NZM underperformed the NZ Media industry which returned -14.2% over the past year.

Return vs Market: NZM underperformed the NZ Market which returned 21.1% over the past year.


Shareholder returns

NZMIndustryMarket
7 Day-4.7%1.5%-0.2%
30 Day-2.4%-0.05%2.4%
90 Day-8.9%-7.4%-0.2%
1 Year-18.0%-18.0%-10.1%-14.2%26.1%21.1%
3 Year-9.9%-29.3%-10.5%-25.2%59.2%38.2%
5 Yearn/a-28.6%-49.2%94.7%51.2%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is NZME 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: NZM (NZ$0.41) is trading below our estimate of fair value (NZ$1.48)

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


Price To Earnings Ratio

PE vs Industry: NZM is good value based on its PE Ratio (8.7x) compared to the Media industry average (12.2x).

PE vs Market: NZM is good value based on its PE Ratio (8.7x) compared to the NZ market (20.1x).


Price to Earnings Growth Ratio

PEG Ratio: NZM is good value based on its PEG Ratio (0.9x)


Price to Book Ratio

PB vs Industry: NZM is good value based on its PB Ratio (0.3x) compared to the XO Media industry average (1.3x).


Next Steps

Future Growth

How is NZME forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

9.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: NZM's forecast earnings growth (9.6% per year) is above the savings rate (1.3%).

Earnings vs Market: NZM's earnings (9.6% per year) are forecast to grow faster than the NZ market (7.7% per year).

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

Revenue vs Market: NZM's revenue is expected to decline over the next 3 years (-2.3% per year).

High Growth Revenue: NZM's revenue is forecast to decline over the next 3 years (-2.3% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: NZM's Return on Equity is forecast to be low in 3 years time (4.9%).


Next Steps

Past Performance

How has NZME performed over the past 5 years?

45.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: NZM has a large one-off loss of NZ$8.1M impacting its June 30 2019 financial results.

Growing Profit Margin: NZM's current net profit margins (2.4%) are lower than last year (4.3%).


Past Earnings Growth Analysis

Earnings Trend: NZM has become profitable over the past 5 years, growing earnings by 45% per year.

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

Earnings vs Industry: NZM had negative earnings growth (-44.8%) over the past year, making it difficult to compare to the Media industry average (-30.9%).


Return on Equity

High ROE: NZM's Return on Equity (3.1%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is NZME's financial position?


Financial Position Analysis

Short Term Liabilities: NZM's short term assets (NZ$70.0M) exceed its short term liabilities (NZ$62.2M).

Long Term Liabilities: NZM's short term assets (NZ$70.0M) do not cover its long term liabilities (NZ$185.0M).


Debt to Equity History and Analysis

Debt Level: NZM's debt to equity ratio (35.9%) is considered satisfactory.

Reducing Debt: NZM's debt to equity ratio has increased from 31.2% to 35.9% over the past 5 years.

Debt Coverage: NZM's debt is well covered by operating cash flow (36.7%).

Interest Coverage: NZM's interest payments on its debt are well covered by EBIT (3.8x coverage).


Balance Sheet

Inventory Level: NZM has a high level of physical assets or inventory.

Debt Coverage by Assets: NZM's debt is not covered by short term assets (assets are 0.7x debt).


Next Steps

Dividend

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

5.37%

Forecast Dividend Yield


Dividend Yield vs Market

company0%marketbottom25%3.0%markettop25%5.5%industryaverage5.7%forecastin3Years5.4%

Current dividend yield vs market & industry

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

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

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


Current Payout to Shareholders

Dividend Coverage: NZM is not paying a notable dividend for the NZ market.


Future Payout to Shareholders

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


Next Steps

Management

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

1.0yrs

Average management tenure


CEO

Michael Boggs 0

3.7yrs

Tenure

NZ$1,326,872

Compensation

Mr. Michael Raymond Boggs, CA had been the Chief Executive Officer of NZME Limited at HT&E Limited (Formerly known as APN News & Media Limited) since April 8, 2016 until June 29, 2016. Mr. Boggs served as  ...


CEO Compensation Analysis

Compensation vs Market: Michael's total compensation ($USD866.84K) is above average for companies of similar size in the NZ market ($USD65.86K).

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


Management Age and Tenure

1.0yrs

Average Tenure

Experienced Management: NZM's management team is not considered experienced ( 1 years average tenure), which suggests a new team.


Board Age and Tenure

2.0yrs

Average Tenure

Experienced Board: NZM's board of directors are not considered experienced ( 2 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

BuyNZ$28,62229 Oct 19
Spheria Asset Management Pty Ltd
EntityCompany
Shares64,777
Max PriceNZ$0.44
BuyNZ$1,328,74916 Sep 19
Spheria Asset Management Pty Ltd
EntityCompany
Shares2,927,142
Max PriceNZ$0.58
BuyNZ$967,39602 Jul 19
Spheria Asset Management Pty Ltd
EntityCompany
Shares1,994,426
Max PriceNZ$0.51
BuyNZ$56,34003 Jun 19
Spheria Asset Management Pty Ltd
EntityCompany
Shares106,185
Max PriceNZ$0.54
BuyNZ$5,115,86601 May 19
Spheria Asset Management Pty Ltd
EntityCompany
Shares9,479,951
Max PriceNZ$0.54

Ownership Breakdown

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


Management Team

  • Michael Boggs

    Chief Executive Officer

    • Tenure: 3.7yrs
    • Compensation: NZ$1.33m
  • Laura Maxwell-Hansen

    Chief Digital Officer

    • Tenure: 0yrs
  • Wendy Palmer

    Chief Radio & Commercial Officer

    • Tenure: 0.08yrs
  • David Mackrell

    Chief Financial Officer

    • Tenure: 0.8yrs
  • Shayne Currie

    Managing Editor

    • Tenure: 0yrs
  • Allison Whitney

    General Counsel & Company Secretary

    • Tenure: 0yrs
  • Matt Wilson

    Chief Operating Officer

    • Tenure: 0yrs
  • Matt Headland

    Chief Commercial Officer

    • Tenure: 2.1yrs
  • Alexa Preston

    General Manager of Corporate Finance & Investor Relations

    • Tenure: 0yrs
  • Katie Mills

    Chief Marketing Officer

    • Tenure: 1yrs

Board Members

  • Sussan Turner

    Independent Director

    • Tenure: 1.4yrs
    • Compensation: NZ$55.26k
  • Barbara Chapman (59yo)

    Independent Director

    • Tenure: 1.7yrs
    • Compensation: NZ$85.20k
  • Peter Cullinane

    Independent Chairman of the Board

    • Tenure: 2yrs
    • Compensation: NZ$171.48k
  • Carol Campbell

    Independent Director

    • Tenure: 3.5yrs
    • Compensation: NZ$124.75k
  • David Edward Gibson

    Independent Director

    • Tenure: 2yrs
    • Compensation: NZ$128.53k

Company Information

NZME Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: NZME Limited
  • Ticker: NZM
  • Exchange: NZSE
  • Founded:
  • Industry: Publishing
  • Sector: Media
  • Market Cap: NZ$81.345m
  • Shares outstanding: 196.01m
  • Website: https://www.nzme.co.nz

Location

  • NZME Limited
  • 2 Graham Street
  • Auckland
  • 1010
  • New Zealand

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
NZMNZSE (New Zealand Stock Exchange)YesOrdinary SharesNZNZDJun 2016
NZMCHIA (Chi-X Australia)YesOrdinary SharesAUAUDJun 2016
NZMASX (Australian Securities Exchange)YesOrdinary SharesAUAUDJun 2016
NZMCHIA (Chi-X Australia)YesOrdinary SharesAUAUDJun 2016
NZME.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJun 2016

Biography

NZME Limited, together with its subsidiaries, operates as an integrated media and entertainment company in New Zealand. It is involved in the provision of advertising on various platforms, including includ ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/08 10:41
End of Day Share Price2019/12/05 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.