NZSE:ERD

Stock Analysis Report

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Executive Summary

EROAD Limited provides electronic on-board units and software as a service to the transport industry in New Zealand and internationally. More Details


Snowflake Analysis

Reasonable growth potential with mediocre balance sheet.

Share Price & News

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


Latest Share Price and Events

Stable Share Price: ERD is not significantly more volatile than the rest of NZ stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: ERD's weekly volatility (4%) has been stable over the past year.


Market Performance


7 Day Return

5.0%

ERD

1.0%

NZ Electronic

0.8%

NZ Market


1 Year Return

45.3%

ERD

37.1%

NZ Electronic

8.5%

NZ Market

Return vs Industry: ERD exceeded the NZ Electronic industry which returned 37.1% over the past year.

Return vs Market: ERD exceeded the NZ Market which returned 8.5% over the past year.


Shareholder returns

ERDIndustryMarket
7 Day5.0%1.0%0.8%
30 Day12.4%1.8%3.4%
90 Day11.1%8.0%5.4%
1 Year45.3%45.3%40.2%37.1%12.6%8.5%
3 Year48.6%48.6%130.7%116.4%48.7%29.7%
5 Year97.4%97.4%183.4%159.7%99.7%52.0%

Long-Term Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

153.27x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: ERD (NZ$4.62) is trading above our estimate of fair value (NZ$1.42)

Significantly Below Fair Value: ERD is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: ERD is poor value based on its PE Ratio (153.3x) compared to the XO Electronic industry average (28.6x).

PE vs Market: ERD is poor value based on its PE Ratio (153.3x) compared to the NZ market (23x).


Price to Earnings Growth Ratio

PEG Ratio: ERD is poor value based on its PEG Ratio (1.9x)


Price to Book Ratio

PB vs Industry: ERD is good value based on its PB Ratio (3.4x) compared to the XO Electronic industry average (4.3x).


Next Steps

Future Growth

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

79.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ERD's forecast earnings growth (79.9% per year) is above the savings rate (2.6%).

Earnings vs Market: ERD's earnings (79.9% per year) are forecast to grow faster than the NZ market (11.1% per year).

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

Revenue vs Market: ERD's revenue (14.8% per year) is forecast to grow faster than the NZ market (5.5% per year).

High Growth Revenue: ERD's revenue (14.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ERD's Return on Equity is forecast to be low in 3 years time (8%).


Next Steps

Past Performance

How has EROAD performed over the past 5 years?

12.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ERD has a large one-off loss of NZ$2.0M impacting its September 30 2020 financial results.

Growing Profit Margin: ERD became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: ERD has become profitable over the past 5 years, growing earnings by 12.7% per year.

Accelerating Growth: ERD has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: ERD has become profitable in the last year, making it difficult to compare its past year earnings growth to the Electronic industry (-1.1%).


Return on Equity

High ROE: ERD's Return on Equity (2.3%) is considered low.


Next Steps

Financial Health

How is EROAD's financial position?


Financial Position Analysis

Short Term Liabilities: ERD's short term assets (NZ$72.8M) exceed its short term liabilities (NZ$31.6M).

Long Term Liabilities: ERD's short term assets (NZ$72.8M) exceed its long term liabilities (NZ$38.7M).


Debt to Equity History and Analysis

Debt Level: ERD's debt to equity ratio (41%) is considered high.

Reducing Debt: ERD's debt to equity ratio has increased from 0.04% to 41% over the past 5 years.

Debt Coverage: ERD's debt is well covered by operating cash flow (73.1%).

Interest Coverage: ERD's interest payments on its debt are not well covered by EBIT (2.9x coverage).


Balance Sheet


Next Steps

Dividend

What is EROAD current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

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

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

Growing Dividend: Insufficient data to determine if ERD'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 ERD'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?

2.0yrs

Average management tenure


CEO

Steven Newman

13.83yrs

Tenure

NZ$1,040,288

Compensation

Mr. Steven Newman has been the Chief Executive Officer at EROAD Limited since 2007. Mr. Newman has a wealth of experience to EROAD after a long and successful association with Navman, which he Co-Founded. ...


CEO Compensation Analysis

Compensation vs Market: Steven's total compensation ($USD728.19K) is above average for companies of similar size in the NZ market ($USD555.99K).

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


Leadership Team

NamePositionTenureCompensationOwnership
Steven Newman
CEO & Executive Director13.83yrsNZ$1.04m0.16%
NZ$ 584.1k
Alex Ball
Chief Financial Officer1.75yrsno data0.012%
NZ$ 46.5k
Jarred Clayton
Chief Operating Officer4.33yrsno data0.45%
NZ$ 1.7m
Mark Heine
Executive VPno datano datano data
Genevieve Tearle
Chief Marketing Officer & GM of EROAD Where2yrsno datano data
Mike Sweet
Chief People Officer1.83yrsno datano data
Matthew Dalton
Executive Vice President of Operations1.67yrsno datano data
Sarah Thompson
Chief Product Officerno datano datano data
Norman Ellis
President of North America3.83yrsno datano data

2.0yrs

Average Tenure

Experienced Management: ERD's management team is considered experienced (2 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Steven Newman
CEO & Executive Director13.83yrsNZ$1.04m0.16%
NZ$ 584.1k
Susan Paterson
Independent Director1.67yrsNZ$80.00k0.016%
NZ$ 59.2k
Graham Stuart
Independent Chairman of the Board2.25yrsNZ$110.00k0.065%
NZ$ 244.0k
Anthony Gibson
Independent Director11.08yrsNZ$63.00k0.72%
NZ$ 2.7m
Barry Einsig
Independent Director0.83yrNZ$44.63kno data

2.3yrs

Average Tenure

Experienced Board: ERD's board of directors are not considered experienced ( 2.3 years average tenure), which suggests a new board.


Ownership

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


Insider Trading Volume

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


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 20.2%.


Top Shareholders

Company Information

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


Key Information

  • Name: EROAD Limited
  • Ticker: ERD
  • Exchange: NZSE
  • Founded: 2000
  • Industry: Electronic Equipment and Instruments
  • Sector: Tech
  • Market Cap: NZ$374.298m
  • Shares outstanding: 81.02m
  • Website: https://www.eroad.co.nz

Number of Employees


Location

  • EROAD Limited
  • 260 Oteha Valley Road
  • Level 3
  • Auckland
  • 632
  • New Zealand

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ERDNZSE (New Zealand Stock Exchange)YesOrdinary SharesNZNZDAug 2014
ERDL.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDAug 2014
ERDASX (Australian Securities Exchange)YesOrdinary SharesAUAUDAug 2014
ERDCHIA (Chi-X Australia)YesOrdinary SharesAUAUDAug 2014

Biography

EROAD Limited provides electronic on-board units and software as a service to the transport industry in New Zealand and internationally. The company offers products to reduce the time and money spend on ro...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/11/27 06:08
End of Day Share Price2020/11/27 00:00
Earnings2020/09/30
Annual Earnings2020/03/31


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.