NZSE:SPK

Stock Analysis Report

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Market Cap

NZ$9.0b

Last Updated

2021/06/12 10:18 UTC

Data Sources

Company Financials +

Executive Summary

Spark New Zealand Limited, together with its subsidiaries, provides telecommunications and digital services in New Zealand. More Details


Snowflake Analysis

Fair value with mediocre balance sheet.


Similar Companies

Share Price & News

How has Spark New Zealand's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: SPK is less volatile than 75% of NZ stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: SPK's weekly volatility (3%) has been stable over the past year.


Market Performance


7 Day Return

3.4%

SPK

1.8%

NZ Telecom

-0.3%

NZ Market


1 Year Return

11.3%

SPK

16.3%

NZ Telecom

14.0%

NZ Market

Return vs Industry: SPK underperformed the NZ Telecom industry which returned 16.3% over the past year.

Return vs Market: SPK underperformed the NZ Market which returned 14% over the past year.


Shareholder returns

SPKIndustryMarket
7 Day3.4%1.8%-0.3%
30 Day7.8%5.1%-0.5%
90 Day6.2%6.7%-1.2%
1 Year18.6%11.3%22.0%16.3%17.1%14.0%
3 Year52.8%25.0%47.3%26.7%37.7%21.2%
5 Year100.2%39.3%-0.6%-24.2%79.9%38.2%

Long-Term Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Spark New Zealand undervalued compared to its fair value and its price relative to the market?

17.1%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: SPK (NZ$4.82) is trading below our estimate of fair value (NZ$5.81)

Significantly Below Fair Value: SPK is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: SPK is good value based on its PE Ratio (21.7x) compared to the Oceanic Telecom industry average (31.1x).

PE vs Market: SPK is good value based on its PE Ratio (21.7x) compared to the NZ market (22.2x).


Price to Earnings Growth Ratio

PEG Ratio: SPK is poor value based on its PEG Ratio (10.7x)


Price to Book Ratio

PB vs Industry: SPK is overvalued based on its PB Ratio (6.2x) compared to the XO Telecom industry average (3.1x).


Future Growth

How is Spark New Zealand forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

2.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SPK's forecast earnings growth (2% per year) is below the savings rate (2.1%).

Earnings vs Market: SPK's earnings (2% per year) are forecast to grow slower than the NZ market (12.8% per year).

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

Revenue vs Market: SPK's revenue (2% per year) is forecast to grow slower than the NZ market (6% per year).

High Growth Revenue: SPK's revenue (2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SPK's Return on Equity is forecast to be high in 3 years time (30%)


Past Performance

How has Spark New Zealand performed over the past 5 years?

1.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SPK has high quality earnings.

Growing Profit Margin: SPK's current net profit margins (11.3%) are lower than last year (11.7%).


Past Earnings Growth Analysis

Earnings Trend: SPK's earnings have grown by 1.8% per year over the past 5 years.

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

Earnings vs Industry: SPK had negative earnings growth (-3.6%) over the past year, making it difficult to compare to the Telecom industry average (-10.1%).


Return on Equity

High ROE: Whilst SPK's Return on Equity (28.39%) is high, this metric is skewed due to their high level of debt.


Financial Health

How is Spark New Zealand's financial position?


Financial Position Analysis

Short Term Liabilities: SPK's short term assets (NZ$934.0M) exceed its short term liabilities (NZ$800.0M).

Long Term Liabilities: SPK's short term assets (NZ$934.0M) do not cover its long term liabilities (NZ$2.0B).


Debt to Equity History and Analysis

Debt Level: SPK's debt to equity ratio (118.9%) is considered high.

Reducing Debt: SPK's debt to equity ratio has increased from 37.6% to 118.9% over the past 5 years.

Debt Coverage: SPK's debt is well covered by operating cash flow (53.3%).

Interest Coverage: SPK's interest payments on its debt are well covered by EBIT (11.1x coverage).


Balance Sheet


Dividend

What is Spark New Zealand current dividend yield, its reliability and sustainability?

5.19%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: SPK's dividend (5.19%) is higher than the bottom 25% of dividend payers in the NZ market (2.34%).

High Dividend: SPK's dividend (5.19%) is in the top 25% of dividend payers in the NZ market (4.53%)


Stability and Growth of Payments

Stable Dividend: SPK's dividend payments have been volatile in the past 10 years.

Growing Dividend: SPK's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (112.8%), SPK's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SPK's dividends in 3 years are not forecast to be well covered by earnings (111.6% payout ratio).


Next Steps

Management

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

2.3yrs

Average management tenure


CEO

Jolie Hodson

1.92yrs

Tenure

NZ$3,046,998

Compensation

Ms. Jolie Hodson has been an Executive Director of Spark New Zealand Limited since September 23, 2019 and its Chief Executive since July 1, 2019. Ms. Hodson served as Customer Director of Spark New Zealand...


CEO Compensation Analysis

Compensation vs Market: Jolie's total compensation ($USD2.19M) is above average for companies of similar size in the NZ market ($USD1.58M).

Compensation vs Earnings: Insufficient data to compare Jolie's compensation with company performance.


Leadership Team

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


Board Members

Experienced Board: SPK's board of directors are considered experienced (3.6 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: SPK insiders have only sold shares 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

Spark New Zealand Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Spark New Zealand Limited
  • Ticker: SPK
  • Exchange: NZSE
  • Founded: 1987
  • Industry: Integrated Telecommunication Services
  • Sector: Telecom
  • Market Cap: NZ$9.000b
  • Shares outstanding: 1.87b
  • Website: https://www.sparknz.co.nz

Number of Employees


Location

  • Spark New Zealand Limited
  • Spark City
  • Level 2
  • Auckland
  • 1010
  • New Zealand

Listings


Biography

Spark New Zealand Limited, together with its subsidiaries, provides telecommunications and digital services in New Zealand. It offers telecommunications, information technology, media, and other digital pr...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/06/12 10:18
End of Day Share Price2021/06/11 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.