WSE:ECH

Stock Analysis Report

Executive Summary

Echo Investment S.A., through its subsidiaries, engages in the construction, lease, and sale of office, retail, and residential buildings in Poland and Hungary.

Rewards

PE ratio (7.7x) is below the Polish market (11.6x)

Revenue is forecast to grow 11.48% per year

Earnings grew by 15.6% over the past year

Risk Analysis

Earnings are forecast to decline by an average of -3.5% per year for the next 3 years

Interest payments are not well covered by earnings

Unstable dividend track record

Large one-off items impacting financial results



Snowflake Analysis

Average dividend payer with acceptable track record.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

2.4%

ECH

0.7%

PL Real Estate

-1.1%

PL Market


1 Year Return

51.2%

ECH

9.6%

PL Real Estate

-7.7%

PL Market

Return vs Industry: ECH exceeded the Polish Real Estate industry which returned 10.6% over the past year.

Return vs Market: ECH exceeded the Polish Market which returned -4.3% over the past year.


Shareholder returns

ECHIndustryMarket
7 Day2.4%0.7%-1.1%
30 Day4.7%5.2%1.8%
90 Day15.8%7.9%2.0%
1 Year68.9%51.2%14.7%9.6%-4.8%-7.7%
3 Year33.6%-12.9%11.8%-2.5%0.6%-6.7%
5 Year227.5%-23.3%67.1%20.6%5.2%-8.1%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

7.92x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: ECH (PLN4.91) is trading above our estimate of fair value (PLN3.22)

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


Price To Earnings Ratio

PE vs Industry: ECH is good value based on its PE Ratio (7.7x) compared to the Real Estate industry average (8.5x).

PE vs Market: ECH is good value based on its PE Ratio (7.7x) compared to the Polish market (11.6x).


Price to Earnings Growth Ratio

PEG Ratio: ECH's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: ECH is overvalued based on its PB Ratio (1.5x) compared to the PL Real Estate industry average (0.6x).


Next Steps

Future Growth

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

-3.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ECH's earnings are forecast to decline over the next 3 years (-3.5% per year).

Earnings vs Market: ECH's earnings are forecast to decline over the next 3 years (-3.5% per year).

High Growth Earnings: ECH's earnings are forecast to decline over the next 3 years.

Revenue vs Market: ECH's revenue (11.5% per year) is forecast to grow faster than the Polish market (5.1% per year).

High Growth Revenue: ECH's revenue (11.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ECH's Return on Equity is forecast to be low in 3 years time (13.6%).


Next Steps

Past Performance

How has Echo Investment performed over the past 5 years?

-5.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ECH has a large one-off gain of PLN511.2M impacting its September 30 2019 financial results.

Growing Profit Margin: ECH's current net profit margins (40.5%) are higher than last year (28.1%).


Past Earnings Growth Analysis

Earnings Trend: ECH's earnings have declined by -5.2% per year over the past 5 years.

Accelerating Growth: ECH's earnings growth over the past year (15.6%) exceeds its 5-year average (-5.2% per year).

Earnings vs Industry: ECH earnings growth over the past year (15.6%) exceeded the Real Estate industry -10%.


Return on Equity

High ROE: ECH's Return on Equity (19.2%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Echo Investment's financial position?


Financial Position Analysis

Short Term Liabilities: ECH's short term assets (PLN2.0B) exceed its short term liabilities (PLN1.3B).

Long Term Liabilities: ECH's short term assets (PLN2.0B) exceed its long term liabilities (PLN2.0B).


Debt to Equity History and Analysis

Debt Level: ECH's debt to equity ratio (111.6%) is considered high.

Reducing Debt: ECH's debt to equity ratio has increased from 86% to 111.6% over the past 5 years.

Debt Coverage: ECH's debt is not well covered by operating cash flow (3.5%).

Interest Coverage: ECH's interest payments on its debt are not well covered by EBIT (0.3x coverage).


Balance Sheet

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

Debt Coverage by Assets: ECH's debt is covered by short term assets (assets are 1.3x debt).


Next Steps

Dividend

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

9.84%

Current Dividend Yield


Dividend Yield vs Market

company9.8%marketbottom25%2.3%markettop25%6.7%industryaverage5.8%forecastin3Years8.9%

Current dividend yield vs market & industry

Notable Dividend: ECH's dividend (10.18%) is higher than the bottom 25% of dividend payers in the Polish market (2.4%).

High Dividend: ECH's dividend (10.18%) is in the top 25% of dividend payers in the Polish market (7.05%)


Stability and Growth of Payments

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

Growing Dividend: ECH has only been paying a dividend for 4 years, and since then payments have fallen.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (78%), ECH's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: ECH's dividends in 3 years are forecast to be covered by earnings (73.4% payout ratio).


Next Steps

Management

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

3.5yrs

Average management tenure


CEO

Nicklas Lindberg 0

3.8yrs

Tenure

zł5,092,335

Compensation

Mr. Nicklas Lindberg has been President of the Management Board at Echo Investment S.A. since April 18, 2016 and serves as its Chief Executive Officer. Mr. Lindberg served as the President of Skanska Comme ...


CEO Compensation Analysis

Compensation vs Market: Nicklas's total compensation ($USD0.00) is below average for companies of similar size in the Polish market ($USD456.72K).

Compensation vs Earnings: Nicklas's compensation has increased by more than 20% in the past year.


Management Age and Tenure

3.5yrs

Average Tenure

Experienced Management: ECH's management team is considered experienced (3.5 years average tenure).


Board Age and Tenure

4.5yrs

Average Tenure

Experienced Board: ECH's board of directors are considered experienced (4.5 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.


Ownership Breakdown

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


Management Team

  • Artur Langner

    Vice President of the Management Board

    • Tenure: 11.6yrs
    • Compensation: zł360.00k
  • Nicklas Lindberg

    President of the Management Board & CEO

    • Tenure: 3.8yrs
    • Compensation: zł5.09m
  • Maciej Drozd (57yo)

    Vice President of the Management Board & CFO

    • Tenure: 4.5yrs
    • Compensation: zł3.11m
  • Marcin Materny

    Head of Shopping Center Department and Member of Management Board

    • Tenure: 3.3yrs
    • Compensation: zł323.00k
  • Andrzej Zalucki

    Head of Marketing Department

    • Rafal Mazurczak

      Head of Office & Hotel Department and Member of Management Board

      • Tenure: 3.3yrs
      • Compensation: zł233.62k
    • Wojciech Gepner

      Head of Public Relations Department

      • Anna Gabryszewska-Wybraniec

        Chief Accountant

        • Malgorzata Turek

          Member of Management Board

          • Waldemar Olbryk

            Member of Management Board

            • Tenure: 2.3yrs
            • Compensation: zł158.52k

          Board Members

          • Laurent Luccioni (47yo)

            Vice-President of the Supervisory Board

            • Tenure: 4.5yrs
          • Mark Abramson

            Independent Member of the Supervisory Board

            • Tenure: 2.3yrs
          • Nebil Senman (47yo)

            Member of Supervisory Board

            • Tenure: 4.6yrs
          • Sebastian Zilles

            Member of Supervisory Board

            • Tenure: 4.3yrs
          • Karim Khairallah

            Chairman of the Supervisory Board

            • Tenure: 4.5yrs
          • Maciej Dyjas

            Member of Supervisory Board

            • Tenure: 4.6yrs
          • Stefan Kawalec

            Independent Member of Supervisory Board

            • Tenure: 4.6yrs

          Company Information

          Echo Investment S.A.'s company bio, employee growth, exchange listings and data sources


          Key Information

          • Name: Echo Investment S.A.
          • Ticker: ECH
          • Exchange: WSE
          • Founded: 1994
          • Industry: Real Estate Operating Companies
          • Sector: Real Estate
          • Market Cap: zł2.096b
          • Shares outstanding: 412.69m
          • Website: https://www.echo.com.pl

          Number of Employees


          Location

          • Echo Investment S.A.
          • al. Solidarnosci 36
          • Kielce
          • 25-323
          • Poland

          Listings

          TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
          ECHWSE (Warsaw Stock Exchange)YesOrdinary Bearer SharesPLPLNMar 1996
          0LTKLSE (London Stock Exchange)YesOrdinary Bearer SharesGBPLNMar 1996

          Biography

          Echo Investment S.A., through its subsidiaries, engages in the construction, lease, and sale of office, retail, and residential buildings in Poland and Hungary. The company operates through Residential Areas, Shopping Centres, and Office Buildings segments. It also rents and sells residential service areas; provides accounting and consulting services; acts as a general contractor and managing contractor; and trades in real estate properties. The company was founded in 1994 and is headquartered in Kielce, Poland. Echo Investment S.A. is a subsidiary of Lisala Sp. z o.o. 


          Company Analysis and Financial Data Status

          All financial data provided by Standard & Poor's Capital IQ.
          DataLast Updated (UTC time)
          Company Analysis2020/01/22 21:21
          End of Day Share Price2020/01/22 00:00
          Earnings2019/09/30
          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.