OM:IAR B

Stock Analysis Report

IAR Systems Group

Executive Summary

IAR Systems Group AB (publ) provides software tools and services for the programming of processors in embedded systems worldwide.

Snowflake

Excellent balance sheet average dividend payer.

Rewards

Trading at 8% below its fair value

Earnings are forecast to grow by 2.94% next year

Earnings grew by 11.6% over the past year

Risk Analysis

Unstable dividend track record

Highly volatile share price over past 3 months

Current net profit margin (22.1%) is lower than last year (22.2%)

Shareholders have been diluted in the past year


Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

-13.4%

IAR B

3.6%

SE Software

0.004%

SE Market


1 Year Return

-27.3%

IAR B

36.7%

SE Software

17.2%

SE Market

Return vs Industry: IAR B underperformed the Swedish Software industry which returned 36.7% over the past year.

Return vs Market: IAR B underperformed the Swedish Market which returned 17.2% over the past year.


Shareholder returns

IAR BIndustryMarket
7 Day-13.4%3.6%0.004%
30 Day-20.4%5.9%5.6%
90 Day-23.3%17.6%11.3%
1 Year-26.0%-27.3%38.2%36.7%22.3%17.2%
3 Year1.6%-4.6%102.3%92.2%40.5%19.0%
5 Year184.9%145.8%233.6%206.6%61.3%26.7%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

8.0%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: IAR B (SEK178.8) is trading below our estimate of fair value (SEK194.36)

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


Price To Earnings Ratio

PE vs Industry: IAR B is good value based on its PE Ratio (27.1x) compared to the Software industry average (39.3x).

PE vs Market: IAR B is poor value based on its PE Ratio (27.1x) compared to the Swedish market (18.1x).


Price to Earnings Growth Ratio

PEG Ratio: IAR B is poor value based on its PEG Ratio (1.5x)


Price to Book Ratio

PB vs Industry: IAR B is good value based on its PB Ratio (4.5x) compared to the SE Software industry average (5.3x).


Next Steps

Future Growth

How is IAR Systems Group forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

17.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: IAR B's forecast earnings growth (17.7% per year) is above the savings rate (0.4%).

Earnings vs Market: IAR B's earnings (17.7% per year) are forecast to grow faster than the Swedish market (9.4% per year).

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

Revenue vs Market: IAR B's revenue (14.3% per year) is forecast to grow faster than the Swedish market (4.3% per year).

High Growth Revenue: IAR B's revenue (14.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: IAR B's Return on Equity is forecast to be low in 3 years time (19.2%).


Next Steps

Past Performance

How has IAR Systems Group performed over the past 5 years?

15.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: IAR B has high quality earnings.

Growing Profit Margin: IAR B's current net profit margins (22.1%) are lower than last year (22.2%).


Past Earnings Growth Analysis

Earnings Trend: IAR B's earnings have grown by 15.2% per year over the past 5 years.

Accelerating Growth: IAR B's earnings growth over the past year (11.6%) is below its 5-year average (15.2% per year).

Earnings vs Industry: IAR B earnings growth over the past year (11.6%) exceeded the Software industry 3.1%.


Return on Equity

High ROE: IAR B's Return on Equity (16.3%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is IAR Systems Group's financial position?


Financial Position Analysis

Short Term Liabilities: IAR B's short term assets (SEK186.1M) exceeds its short term liabilities (SEK169.7M)

Long Term Liabilities: IAR B's short term assets (186.1M) exceeds its long term liabilities (60.9M)


Debt to Equity History and Analysis

Debt Level: IAR B's debt to equity ratio (5.5%) is considered satisfactory

Reducing Debt: IAR B's debt to equity ratio has increased from 0% to 5.5% over the past 5 years.

Debt Coverage: IAR B's debt is well covered by operating cash flow (323.9%).

Interest Coverage: IAR B's interest payments on its debt are well covered by EBIT (64.2x coverage).


Balance Sheet

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

Debt Coverage by Assets: IAR B's debt is covered by short term assets (assets are 6.3x debt).


Next Steps

Dividend

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

2.80%

Current Dividend Yield


Dividend Yield vs Market

company2.8%marketbottom25%1.7%markettop25%4.8%industryaverage1.1%forecastin3Years3.1%

Current dividend yield vs market & industry

Notable Dividend: IAR B's dividend (2.8%) is higher than the bottom 25% of dividend payers in the Swedish market (1.73%).

High Dividend: IAR B's dividend (2.8%) is low compared to the top 25% of dividend payers in the Swedish market (4.8%).


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (75.9%), IAR B's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: IAR B's dividends in 3 years are forecast to be covered by earnings (68% payout ratio).


Next Steps

Management

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

11.2yrs

Average management tenure


CEO

Stefan Skarin (57yo)

11.8yrs

Tenure

kr5,451,000

Compensation

Mr. Stefan Skarin has been the Chief Executive Officer and President of IAR Systems Group AB (publ) (also known as Intoi AB) at Signum Systems Corporation since February, 2008. Mr. Skarin serves as the Chi ...


CEO Compensation Analysis

Compensation vs Market: Stefan's total compensation ($USD561.56K) is above average for companies of similar size in the Swedish market ($USD301.62K).

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


Management Age and Tenure

11.2yrs

Average Tenure

57yo

Average Age

Experienced Management: IAR B's management team is seasoned and experienced (11.2 years average tenure).


Board Age and Tenure

2.6yrs

Average Tenure

53yo

Average Age

Experienced Board: IAR B's board of directors are not considered experienced ( 2.6 years average tenure), which suggests a new board.


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 been diluted in the past year, with total shares outstanding growing by 3.9%.


Management Team

  • Stefan Skarin (57yo)

    CEO, President & Director

    • Tenure: 11.8yrs
    • Compensation: kr5.45m
  • Stefan Ström (61yo)

    Chief Financial Officer

    • Tenure: 10.6yrs
    • Compensation: kr2.50m
  • Anders Vallenljord (51yo)

    Chief Executive Officer of Nocom Sverige AB

    • Tenure: 20.8yrs
  • Claes Drougge (59yo)

    Chief Executive Officer of Ocean Modules

    • Tenure: 0yrs
  • Ali Sebt

    Chief Corporate Development Officer

    • Tenure: 1.5yrs
  • Petter Edman (55yo)

    Chief Technology Officer

    • Tenure: 0yrs
  • Carl Toll (57yo)

    COO & IT Manager

    • Tenure: 0yrs
  • Anders Holmberg (52yo)

    Chief Strategy Officer at IAR Systems

    • Tenure: 0yrs
  • Haydn Povey

    CEO of Secure Thingz

    • Tenure: 0yrs

Board Members

  • Kent Sander (66yo)

    Independent Director

    • Tenure: 2.6yrs
  • Stefan Skarin (57yo)

    CEO, President & Director

    • Tenure: 11.8yrs
    • Compensation: kr5.45m
  • Maria Wasing (49yo)

    Chairman of the Board

    • Tenure: 2.6yrs
  • Lisa Kaati (44yo)

    Independent Director

    • Tenure: 2.6yrs
  • Helena Nordman-Knutson

    Independent Director

    • Tenure: 1.6yrs

Company Information

IAR Systems Group AB (publ)'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: IAR Systems Group AB (publ)
  • Ticker: IAR B
  • Exchange: OM
  • Founded: 1983
  • Industry: Application Software
  • Sector: Software
  • Market Cap: kr2.437b
  • Shares outstanding: 13.63m
  • Website: https://www.iar.com

Number of Employees


Location

  • IAR Systems Group AB (publ)
  • Kungsgatan 33
  • Stockholm
  • Stockholm County
  • 111 56
  • Sweden

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
NC91DB (Deutsche Boerse AG)YesSeries B SharesDEEURJan 1999
IAR BOM (OMX Nordic Exchange Stockholm)YesSeries B SharesSESEKJan 1999
0QTVLSE (London Stock Exchange)YesSeries B SharesGBSEKJan 1999
IARS.FOTCPK (Pink Sheets LLC)YesSeries B SharesUSUSDJan 1999
IARBSBATS-CHIXE (BATS 'Chi-X Europe')YesSeries B SharesGBSEKJan 1999

Biography

IAR Systems Group AB (publ) provides software tools and services for the programming of processors in embedded systems worldwide. It offers IAR Embedded Workbench software that enables developers to progra ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/11/11 20:41
End of Day Share Price2019/11/11 00:00
Earnings2019/06/30
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.