NZSE:SDL

Stock Analysis Report

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Executive Summary

Solution Dynamics Limited provides customer communication solutions in New Zealand, Australia, Europe, and the United States. More Details


Snowflake Analysis

Flawless balance sheet with outstanding track record.

Share Price & News

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


Latest Share Price and Events

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

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


Market Performance


7 Day Return

5.8%

SDL

-3.2%

NZ IT

-1.7%

NZ Market


1 Year Return

110.2%

SDL

68.5%

NZ IT

9.0%

NZ Market

Return vs Industry: SDL exceeded the NZ IT industry which returned 68.5% over the past year.

Return vs Market: SDL exceeded the NZ Market which returned 9% over the past year.


Shareholder returns

SDLIndustryMarket
7 Day5.8%-3.2%-1.7%
30 Day4.8%-5.0%0.3%
90 Day46.7%4.5%5.4%
1 Year119.1%110.2%70.7%68.5%13.1%9.0%
3 Year74.7%57.1%157.9%143.1%47.1%28.2%
5 Year150.3%112.9%101.7%77.9%98.3%50.4%

Long-Term Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Solution Dynamics 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: SDL (NZ$3.3) is trading below our estimate of fair value (NZ$21.99)

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


Price To Earnings Ratio

PE vs Industry: SDL is poor value based on its PE Ratio (25.9x) compared to the XO IT industry average (24.4x).

PE vs Market: SDL is poor value based on its PE Ratio (25.9x) compared to the NZ market (23x).


Price to Earnings Growth Ratio

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


Price to Book Ratio

PB vs Industry: SDL is overvalued based on its PB Ratio (9.9x) compared to the XO IT industry average (3.3x).


Next Steps

Future Growth

How is Solution Dynamics forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

44.8%

Forecasted Software industry annual growth in earnings


In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as Solution Dynamics has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.


Next Steps

Past Performance

How has Solution Dynamics performed over the past 5 years?

3.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SDL has high quality earnings.

Growing Profit Margin: SDL's current net profit margins (5.8%) are higher than last year (2.1%).


Past Earnings Growth Analysis

Earnings Trend: SDL's earnings have grown by 3.9% per year over the past 5 years.

Accelerating Growth: SDL's earnings growth over the past year (252.5%) exceeds its 5-year average (3.9% per year).

Earnings vs Industry: SDL earnings growth over the past year (252.5%) exceeded the IT industry -21%.


Return on Equity

High ROE: SDL's Return on Equity (38.1%) is considered high.


Next Steps

Financial Health

How is Solution Dynamics's financial position?


Financial Position Analysis

Short Term Liabilities: SDL's short term assets (NZ$10.3M) exceed its short term liabilities (NZ$8.4M).

Long Term Liabilities: SDL's short term assets (NZ$10.3M) exceed its long term liabilities (NZ$729.0K).


Debt to Equity History and Analysis

Debt Level: SDL is debt free.

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

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

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


Balance Sheet


Next Steps

Dividend

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

3.64%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: SDL's dividend (3.64%) is higher than the bottom 25% of dividend payers in the NZ market (2.73%).

High Dividend: SDL's dividend (3.64%) is low compared to the top 25% of dividend payers in the NZ market (4.35%).


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (70.6%), SDL's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

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

2.3yrs

Average management tenure


CEO

Siva Sivasubramaniam

14.25yrs

Tenure

NZ$374,000

Compensation

Mr. Indrajit Nelson Sivasubramaniam, also known as Siva, has been the Chief Executive Officer of Solution Dynamics Limited since August 2006. Mr. Sivasubramaniam career began with an American based Telecom...


CEO Compensation Analysis

Compensation vs Market: Siva's total compensation ($USD259.87K) is about average for companies of similar size in the NZ market ($USD324.77K).

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


Leadership Team

NamePositionTenureCompensationOwnership
Indrajit Sivasubramaniam
CEO & Director14.25yrsNZ$374.00k6.08%
NZ$ 2.9m
Christopher Veale
CFO, Financial Controller & Company Secretary14.83yrsno data0.91%
NZ$ 438.4k
Nick Williams
General Manager of Technology Services2.83yrsno datano data
Tony Edwards
Sales Manager of Asia Pacific1.83yrsno datano data
Mark Wootton
Chief Operating Officer of Technology Services1.67yrsno datano data
Patrick Brand
President of Solution Dynamics Inc. - North America & Europe0.17yrno datano data
David Thornber
Group Manager of Infrastructureno datano datano data

2.3yrs

Average Tenure

Experienced Management: SDL's management team is considered experienced (2.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Indrajit Sivasubramaniam
CEO & Director14.25yrsNZ$374.00k6.08%
NZ$ 2.9m
Elmar Toime
Independent Director4.75yrsNZ$25.00kno data
Peter Beavis
Independent Director10.5yrsNZ$25.00kno data
Andrew Preece
Independent Director1.5yrsNZ$4.00k0.36%
NZ$ 174.9k
John McMahon
Chairman7.92yrsNZ$45.00k10.93%
NZ$ 5.3m
Lee Eglinton
Independent Director1.5yrsNZ$4.00k0.12%
NZ$ 59.4k

6.3yrs

Average Tenure

Experienced Board: SDL's board of directors are considered experienced (6.3 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

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


Key Information

  • Name: Solution Dynamics Limited
  • Ticker: SDL
  • Exchange: NZSE
  • Founded: 1996
  • Industry: Data Processing and Outsourced Services
  • Sector: Software
  • Market Cap: NZ$48.311m
  • Shares outstanding: 14.64m
  • Website: https://www.solutiondynamics.com

Number of Employees


Location

  • Solution Dynamics Limited
  • 18 Canaveral Drive
  • Albany
  • Auckland
  • 632
  • New Zealand

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SDLNZSE (New Zealand Stock Exchange)YesOrdinary SharesNZNZDJul 2004

Biography

Solution Dynamics Limited provides customer communication solutions in New Zealand, Australia, Europe, and the United States. The company offers advanced digital asset management solutions, which combine a...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/11/23 10:33
End of Day Share Price2020/11/23 00:00
Earnings2020/06/30
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.