NZSE:GTK

Stock Analysis Report

Executive Summary

Gentrack Group Limited engages in the development, integration, and support of enterprise billing and customer management software solutions for the energy and water utility, and airport industries in Australia, New Zealand, the United Kingdom, and internationally.

Rewards

Trading at 15.8% below its fair value

Earnings are forecast to grow 45.54% per year

Risk Analysis

Dividend of 3.03% is not well covered by earnings

Highly volatile share price over past 3 months

Shareholders have been diluted in the past year



Snowflake Analysis

Adequate balance sheet and fair value.

Share Price & News

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


Latest Share Price and Events

Stable Share Price: GTK's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-17.6%

GTK

-0.3%

NZ Software

0.2%

NZ Market


1 Year Return

-58.1%

GTK

-6.8%

NZ Software

23.4%

NZ Market

Return vs Industry: GTK underperformed the NZ Software industry which returned 4% over the past year.

Return vs Market: GTK underperformed the NZ Market which returned 22.5% over the past year.


Shareholder returns

GTKIndustryMarket
7 Day-17.6%-0.3%0.2%
30 Day-39.5%-5.6%1.8%
90 Day-56.9%-13.0%8.3%
1 Year-57.2%-58.1%-5.8%-6.8%28.4%23.4%
3 Year-25.8%-32.3%69.8%61.5%60.8%39.7%
5 Year30.0%7.2%86.8%75.5%97.9%53.5%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Gentrack Group undervalued compared to its fair value and its price relative to the market?

24.3%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: GTK (NZ$2.64) is trading below our estimate of fair value (NZ$3.14)

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


Price To Earnings Ratio

PE vs Industry: GTK is unprofitable, so we can't compare its PE Ratio to the Software industry average.

PE vs Market: GTK is unprofitable, so we can't compare its PE Ratio to the NZ market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate GTK's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: GTK is good value based on its PB Ratio (2x) compared to the NZ Software industry average (3x).


Next Steps

Future Growth

How is Gentrack Group forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

63.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: GTK is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (1.3%).

Earnings vs Market: GTK is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: GTK's is expected to become profitable in the next 3 years.

Revenue vs Market: GTK's revenue (3.7% per year) is forecast to grow slower than the NZ market (4.8% per year).

High Growth Revenue: GTK's revenue (9.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: GTK's Return on Equity is forecast to be low in 3 years time (8.3%).


Next Steps

Past Performance

How has Gentrack Group performed over the past 5 years?

-6.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: GTK is currently unprofitable.

Growing Profit Margin: GTK is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: GTK is unprofitable, and losses have increased over the past 5 years at a rate of -6.9% per year.

Accelerating Growth: Unable to compare GTK's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: GTK is unprofitable, making it difficult to compare its past year earnings growth to the Software industry (22%).


Return on Equity

High ROE: GTK has a negative Return on Equity (-1.68%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Gentrack Group's financial position?


Financial Position Analysis

Short Term Liabilities: GTK's short term assets (NZ$40.5M) exceed its short term liabilities (NZ$32.8M).

Long Term Liabilities: GTK's short term assets (NZ$40.5M) exceed its long term liabilities (NZ$11.3M).


Debt to Equity History and Analysis

Debt Level: GTK's debt to equity ratio (2.3%) is considered satisfactory.

Reducing Debt: GTK's debt to equity ratio has increased from 0% to 2.3% over the past 5 years.

Debt Coverage: GTK's debt is well covered by operating cash flow (287.4%).

Interest Coverage: GTK is unprofitable, therefore interest payments are not well covered by earnings.


Balance Sheet

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

Debt Coverage by Assets: GTK's debt is covered by short term assets (assets are 9.1x debt).


Next Steps

Dividend

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

3.57%

Current Dividend Yield


Dividend Yield vs Market

company3.6%marketbottom25%2.9%markettop25%5.3%industryaverage1.2%forecastin3Years2.7%

Current dividend yield vs market & industry

Notable Dividend: GTK's dividend (3.03%) is higher than the bottom 25% of dividend payers in the NZ market (2.82%).

High Dividend: GTK's dividend (2.03%) is low compared to the top 25% of dividend payers in the NZ market (5.42%).


Stability and Growth of Payments

Stable Dividend: GTK has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: GTK's dividend payments have increased, but the company has only paid a dividend for 5 years.


Current Payout to Shareholders

Dividend Coverage: GTK is paying a dividend but the company is unprofitable.


Future Payout to Shareholders

Future Dividend Coverage: GTK's dividends in 3 years are forecast to be covered by earnings (76.2% payout ratio).


Next Steps

Management

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

3.7yrs

Average management tenure


CEO

Ian Black 0

4yrs

Tenure

0

Mr. Ian Black has been the Chief Executive Officer at Gentrack Group Limited, the holding company of Gentrack Limited since January 18, 2016. Mr. Black is a 30-year old veteran of the technology industry.  ...


Management Age and Tenure

3.7yrs

Average Tenure

Experienced Management: GTK's management team is considered experienced (3.7 years average tenure).


Board Age and Tenure

3.8yrs

Average Tenure

Experienced Board: GTK's board of directors are considered experienced (3.8 years average tenure).


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$32,999,15116 Jan 20
Swann Hill B.V.
EntityCompany
Shares9,533,201
Max PriceNZ$3.46
SellNZ$1,082,48022 Oct 19
BlackRock, Inc.
EntityCompany
Shares190,810
Max PriceNZ$5.73
BuyNZ$39,93504 Jul 19
Harbour Asset Management Limited
EntityCompany
Shares6,620
Max PriceNZ$6.03
SellNZ$6,812,12104 Jul 19
Harbour Asset Management Limited
EntityCompany
Shares1,084,284
Max PriceNZ$6.28

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 13.8%.


Management Team

  • Saul Nurtman

    Managing Director of UK & Europe

    • Aaron Baker

      General Manager of Smart World Solutions and Marketing Manager

      • Tenure: 14.6yrs
    • Jon Kershaw

      GM of Commercial & Legal and Company Secretary

      • Tim Bluett

        Chief Financial Officer

        • Tenure: 1.8yrs
      • Glenn Sutherland

        Vice President of Asia

        • Jan Behrens

          Chief Technology Officer

          • Tenure: 3.3yrs
        • Ian Black

          Chief Executive Officer

          • Tenure: 4yrs
        • Melina Lemalie

          Human Resources Manager

          • Tenure: 4yrs
        • James Williamson

          Chief Executive Officer of Veovo

          • Tenure: 0.08yrs

        Board Members

        • Nick Luckock

          Non-Executive Director

          • Tenure: 1.9yrs
          • Compensation: NZ$62.00k
        • John Clifford

          Non-Executive Chairman

          • Tenure: 12.7yrs
          • Compensation: NZ$103.00k
        • Leigh Warren

          Independent Non-Executive Director

          • Tenure: 7.7yrs
          • Compensation: NZ$62.00k
        • Fiona Oliver

          Non-Executive Director

          • Tenure: 0.9yrs
          • Compensation: NZ$41.00k
        • Andy Coupe

          Independent Non-Executive Director

          • Tenure: 5.8yrs
          • Compensation: NZ$62.00k
        • Darc Rasmussen

          Non Executive Director

          • Tenure: 0.08yrs

        Company Information

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


        Key Information

        • Name: Gentrack Group Limited
        • Ticker: GTK
        • Exchange: NZSE
        • Founded: 1989
        • Industry: Application Software
        • Sector: Software
        • Market Cap: NZ$220.964m
        • Shares outstanding: 98.64m
        • Website: https://www.gentrack.com

        Number of Employees


        Location

        • Gentrack Group Limited
        • 17 Hargreaves Street
        • St Marys Bay
        • Auckland
        • 1011
        • New Zealand

        Listings

        TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
        GTKNZSE (New Zealand Stock Exchange)YesOrdinary SharesNZNZDJun 2014
        GTKASX (Australian Securities Exchange)YesOrdinary SharesAUAUDJun 2014
        GTKCHIA (Chi-X Australia)YesOrdinary SharesAUAUDJun 2014
        GTKCHIA (Chi-X Australia)YesOrdinary SharesAUAUDJun 2014

        Biography

        Gentrack Group Limited engages in the development, integration, and support of enterprise billing and customer management software solutions for the energy and water utility, and airport industries in Australia, New Zealand, the United Kingdom, and internationally. It operates in two segments, Utility Billing Software and Airport Management Software. The company offers Velocity, which is a billing and customer management platform for energy utilities, distributors, and water companies; and Junifer that is a billing and customer information system for utility providers. It also provides Evolve Analytics for data accuracy and portfolio management. Its Airport 20/20, BlipTrack, and Concessionaire Analyzer+ offers operation solutions. The company was founded in 1989 and is headquartered in Auckland, New Zealand. 


        Company Analysis and Financial Data Status

        All financial data provided by Standard & Poor's Capital IQ.
        DataLast Updated (UTC time)
        Company Analysis2020/01/26 10:42
        End of Day Share Price2020/01/24 00:00
        Earnings2019/09/30
        Annual Earnings2019/09/30


        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.