NYSE:GTES

Stock Analysis Report

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Executive Summary

Gates Industrial Corporation plc manufactures and sells engineered power transmission and fluid power solutions worldwide.


Snowflake Analysis

Fair value with questionable track record.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

0.7%

GTES

-0.8%

US Machinery

2.3%

US Market


1 Year Return

-11.4%

GTES

-8.3%

US Machinery

6.7%

US Market

Return vs Industry: GTES underperformed the US Machinery industry which returned -7.4% over the past year.

Return vs Market: GTES underperformed the US Market which returned 6.1% over the past year.


Shareholder returns

GTESIndustryMarket
7 Day0.7%-0.8%2.3%
30 Day-9.6%-4.2%1.5%
90 Day25.0%9.1%17.8%
1 Year-11.4%-11.4%-6.5%-8.3%9.0%6.7%
3 Yearn/a8.8%1.7%36.6%27.7%
5 Yearn/a47.4%29.8%64.2%46.2%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Gates Industrial 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: GTES ($9.94) is trading below our estimate of fair value ($20.74)

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


Price To Earnings Ratio

PE vs Industry: GTES is poor value based on its PE Ratio (25.7x) compared to the US Machinery industry average (18.5x).

PE vs Market: GTES is poor value based on its PE Ratio (25.7x) compared to the US market (15.8x).


Price to Earnings Growth Ratio

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


Price to Book Ratio

PB vs Industry: GTES is good value based on its PB Ratio (1.2x) compared to the US Machinery industry average (1.8x).


Next Steps

Future Growth

How is Gates Industrial forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

16.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: GTES's forecast earnings growth (16.8% per year) is above the savings rate (2.2%).

Earnings vs Market: GTES's earnings (16.8% per year) are forecast to grow slower than the US market (22.8% per year).

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

Revenue vs Market: GTES's revenue (7.7% per year) is forecast to grow slower than the US market (9.4% per year).

High Growth Revenue: GTES's revenue (7.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

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


Next Steps

Past Performance

How has Gates Industrial performed over the past 5 years?

59.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: GTES has high quality earnings.

Growing Profit Margin: GTES's current net profit margins (3.8%) are lower than last year (25.1%).


Past Earnings Growth Analysis

Earnings Trend: GTES has become profitable over the past 5 years, growing earnings by 59.3% per year.

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

Earnings vs Industry: GTES had negative earnings growth (-86.5%) over the past year, making it difficult to compare to the Machinery industry average (-5.4%).


Return on Equity

High ROE: GTES's Return on Equity (4.6%) is considered low.


Next Steps

Financial Health

How is Gates Industrial's financial position?


Financial Position Analysis

Short Term Liabilities: GTES's short term assets ($2.0B) exceed its short term liabilities ($667.7M).

Long Term Liabilities: GTES's short term assets ($2.0B) do not cover its long term liabilities ($3.7B).


Debt to Equity History and Analysis

Debt Level: GTES's debt to equity ratio (105.3%) is considered high.

Reducing Debt: GTES's debt to equity ratio has reduced from 191.3% to 105.3% over the past 5 years.

Debt Coverage: GTES's debt is not well covered by operating cash flow (14.3%).

Interest Coverage: GTES's interest payments on its debt are not well covered by EBIT (2.1x coverage).


Balance Sheet


Next Steps

Dividend

What is Gates Industrial current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

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

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

Growing Dividend: Insufficient data to determine if GTES'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 GTES's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

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

2.4yrs

Average management tenure


CEO

Ivo Jurek (55yo)

no data

Tenure

US$10,486,690

Compensation

Mr. Ivo Jurek has serves as a Director of Gates Industrial Corporation plc since September 2017 and serves as its Chief Executive Officer and has served as Chief Executive Officer and a Director of Gates e ...


CEO Compensation Analysis

Compensation vs Market: Ivo's total compensation ($USD10.49M) is above average for companies of similar size in the US market ($USD5.83M).

Compensation vs Earnings: Ivo's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Ivo Jurek
CEO & Directorno dataUS$10.49m0.069% $2.0m
Walter Lifsey
Executive VP & COO4.92yrsUS$2.39m0.029% $829.4k
Grant Gawronski
Executive VP & Chief Commercial Officer1.58yrsUS$2.37m0.024% $703.4k
L. Mallard
Executive VP & CFO0.42yrno datano data
David Wisniewski
Senior VP & Chief Accounting Officer2.25yrsno data0.0014% $39.3k
Michael Rhymes
Chief Information Officerno datano datano data
Bill Waelke
Vice President of Investor Relations2.58yrsno datano data
Cristin Bracken
Interim General Counsel0.50yrno datano data
Thomas Pitstick
Chief Marketing Officer & Senior VP of Product Line Management3.42yrsno datano data
Roger Gaston
Executive VP & Chief Human Resources Officer3.92yrsUS$1.07m0.0057% $165.0k

2.4yrs

Average Tenure

56yo

Average Age

Experienced Management: GTES's management team is considered experienced (2.4 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Ivo Jurek
CEO & Directorno dataUS$10.49m0.069% $2.0m
Neil Simpkins
Chairman0.50yrno datano data
Terry Klebe
Independent Director2.58yrsUS$250.00k0.020% $570.5k
Wilson Neely
Independent Director0.25yrno datano data
Julia Kahr
Non-Executive Director2.83yrsno datano data
Molly Zhang
Independent Directorno datano datano data
James Ireland
Independent Director1.67yrsUS$225.00k0.0043% $124.6k
Stephanie Mains
Independent Director1.42yrsUS$204.16k0.0021% $61.6k

1.7yrs

Average Tenure

57yo

Average Age

Experienced Board: GTES's board of directors are not considered experienced ( 1.7 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: 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

Gates Industrial Corporation plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Gates Industrial Corporation plc
  • Ticker: GTES
  • Exchange: NYSE
  • Founded: 1911
  • Industry: Industrial Machinery
  • Sector: Capital Goods
  • Market Cap: US$2.890b
  • Shares outstanding: 290.74m
  • Website: https://www.gates.com

Number of Employees


Location

  • Gates Industrial Corporation plc
  • 1144 Fifteenth Street
  • Denver
  • Colorado
  • 80202
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
GTESNYSE (New York Stock Exchange)YesOrdinary SharesUSUSDJan 2018

Biography

Gates Industrial Corporation plc manufactures and sells engineered power transmission and fluid power solutions worldwide. The company offers synchronous or asynchronous belts, including V-belts, CVT belts, and Micro-V belts, as well as related components, such as sprockets, pulleys, water pumps, tensioners, or other accessories; and metal drive components and kits for stationary and mobile drives, engine systems, personal mobility, and vertical lifts application platforms. It also provides fluid power products comprising hydraulic hoses, tubing, and fittings, as well as assemblies; and engine and industrial hoses for use in stationary hydraulics, mobile hydraulics, engine systems, and other industrial applications. The company serves various end markets comprising the construction, agriculture, energy, automotive, transportation, general industrial, consumer products, and others. It sells its engineered products under the Gates brand. The company offers its products to replacement channel customers, as well as to original equipment manufacturers as specified components. Gates Industrial Corporation plc was founded in 1911 and is headquartered in Denver, Colorado. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/07/10 23:57
End of Day Share Price2020/07/10 00:00
Earnings2020/03/28
Annual Earnings2019/12/28


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.