NYSE:GTES

Stock Analysis Report

Executive Summary

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

Snowflake

Fundamentals

Solid track record and good value.


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


Market Performance


7 Day Return

5.7%

GTES

2.5%

US Machinery

0.4%

US Market


1 Year Return

-37.1%

GTES

8.5%

US Machinery

6.9%

US Market

Return vs Industry: GTES underperformed the US Machinery industry which returned 8.5% over the past year.

Return vs Market: GTES underperformed the US Market which returned 6.9% over the past year.


Shareholder returns

GTESIndustryMarket
7 Day5.7%2.5%0.4%
30 Day-4.2%0.9%-1.1%
90 Day-8.2%-0.4%-0.5%
1 Year-37.1%-37.1%10.8%8.5%9.3%6.9%
3 Yearn/a49.9%40.2%45.8%36.4%
5 Yearn/a57.6%38.3%62.9%45.1%

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?

35.0%

Undervalued compared to fair value


Share Price vs. Fair Value

Undervalued: GTES ($9.77) is trading below our estimate of fair value ($15.02)

Significantly Undervalued: GTES is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: GTES is good value based on its PE Ratio (3.7x) compared to the Machinery industry average (20.1x).

PE vs Market: GTES is good value based on its PE Ratio (3.7x) compared to the US market (17.6x).


Price to Earnings Growth Ratio

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


Price to Book Ratio

PB vs Industry: GTES is good value based on its PB Ratio (1.1x) compared to the US Machinery industry average (2.2x).


Next Steps

Future Growth

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

-46.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: GTES's earnings are forecast to decline over the next 3 years (-46.3% per year).

Earnings vs Market: GTES's earnings are forecast to decline over the next 3 years (-46.3% per year).

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

Revenue vs Market: GTES's revenue (1.9% per year) is forecast to grow slower than the US market (7.2% per year).

High Growth Revenue: GTES's revenue (1.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: GTES's Return on Equity is forecast to be low in 3 years time (10.2%).


Next Steps

Past Performance

How has Gates Industrial performed over the past 5 years?

74.3%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: GTES's earnings have grown significantly by 74.3% per year over the past 5 years.

Accelerating Growth: GTES's earnings growth over the past year (220.7%) exceeds its 5-year average (74.3% per year).

Earnings vs Industry: GTES earnings growth over the past year (220.7%) exceeded the Machinery industry 17.5%.


Return on Equity

High ROE: Whilst GTES's Return on Equity (26.19%) is high, this metric is skewed due to their high level of debt.


Return on Assets

ROA vs Industry: GTES has a higher Return on Assets than the Machinery industry average last year.


Return on Capital Employed

ROCE Improving: GTES has significantly improved its Return on Capital Employed over the past 3 years.


Next Steps

Financial Health

How is Gates Industrial's financial position?


Financial Position Analysis

Short Term Liabilities: GTES's short term assets ($1.9B) exceeds its short term liabilities ($641.3M)

Long Term Liabilities: GTES's short term assets (1.9B) do not cover its long term liabilities (3.8B)


Debt to Equity History and Analysis

Debt Level: GTES's debt to equity ratio (101.1%) is considered high

Reducing Debt: GTES's debt to equity ratio has reduced from 106.9% to 101.1% over the past 5 years.

Debt Coverage: GTES's debt is not well covered by operating cash flow (9.4%).

Interest Coverage: GTES's interest payments on its debt are well covered by EBIT (3x coverage).


Balance Sheet

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

Debt Coverage by Assets: GTES's debt is not covered by short term assets (assets are 0.6x debt).


Next Steps

Dividend

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


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.7%industryaverage2.1%forecastin3Years0%

Current dividend yield vs market & industry


Stability and Growth of Payments

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

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

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

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

2.4yrs

Average management tenure


CEO

Ivo Jurek (54yo)

0yrs

Tenure

US$2,534,402

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: Insufficient data to establish whether Ivo's total compensation is reasonable compared to companies of similar size in the US market.

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


Management Age and Tenure

2.4yrs

Average Tenure

54yo

Average Age

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


Board Age and Tenure

1.9yrs

Average Tenure

54yo

Average Age

Experienced Board: GTES's board of directors are not considered experienced ( 1.9 years average tenure), which suggests a new board.


Insider Trading

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


Recent Insider Transactions

BuyUS$1,406,87104 Sep 19
Omaha Aggregator (Cayman) LP
EntityCompany
Shares162,100
Max PriceUS$8.91
BuyUS$960,49030 Aug 19
Omaha Aggregator (Cayman) LP
EntityCompany
Shares114,000
Max PriceUS$8.56
BuyUS$1,766,90026 Aug 19
Omaha Aggregator (Cayman) LP
EntityCompany
Shares209,000
Max PriceUS$8.66
BuyUS$2,322,55021 Aug 19
Omaha Aggregator (Cayman) LP
EntityCompany
Shares282,500
Max PriceUS$8.37
BuyUS$1,955,07016 Aug 19
Omaha Aggregator (Cayman) LP
EntityCompany
Shares246,500
Max PriceUS$7.98
BuyUS$2,101,01713 Aug 19
Omaha Aggregator (Cayman) LP
EntityCompany
Shares264,708
Max PriceUS$8.01
BuyUS$61,04012 Aug 19
Grant Gawronski
EntityIndividual
Role
Senior Key Executive
Executive VP & Chief Commercial Officer
Shares8,000
Max PriceUS$7.63
BuyUS$994,45714 May 19
Walter Lifsey
EntityIndividual
Role
Chief Operating Officer
Chief Operating Officer
Shares76,050
Max PriceUS$13.17
BuyUS$65,40013 May 19
Grant Gawronski
EntityIndividual
Role
Senior Key Executive
Executive VP & Chief Commercial Officer
Shares5,000
Max PriceUS$13.08
BuyUS$13,34013 May 19
Jamey Seely
EntityIndividual
Role
Chief Legal Officer
Executive VP
Shares1,000
Max PriceUS$13.34
BuyUS$72,48306 Nov 18
Ivo Jurek
EntityIndividual
Role
Chief Executive Officer
CEO & Director
Shares5,000
Max PriceUS$14.50

Ownership Breakdown


Management Team

  • Roger Gaston (63yo)

    Executive Vice President of Human Resources

    • Tenure: 3.2yrs
    • Compensation: US$1.07m
  • Walt Lifsey (60yo)

    Chief Operating Officer

    • Tenure: 4.2yrs
    • Compensation: US$1.27m
  • Grant Gawronski (56yo)

    Executive VP & Chief Commercial Officer

    • Tenure: 0.8yrs
    • Compensation: US$2.70m
  • Bill Waelke

    Vice President of Investor Relations

    • Tenure: 1.8yrs
  • Ivo Jurek (54yo)

    CEO & Director

    • Tenure: 0yrs
    • Compensation: US$2.53m
  • Jamey Seely (47yo)

    Executive VP

    • Tenure: 2.1yrs
    • Compensation: US$1.39m
  • Michael Rhymes

    Chief Information Officer

    • Tenure: 0yrs
  • David Naemura (49yo)

    Chief Financial Officer

    • Tenure: 4.6yrs
    • Compensation: US$1.41m
  • Tom Pitstick

    Chief Marketing Officer & Senior VP of Product Line Management

    • Tenure: 2.7yrs
  • David Wisniewski (50yo)

    Chief Accounting Officer

    • Tenure: 1.5yrs

Board Members

  • Neil Simpkins (53yo)

    Director

    • Tenure: 1.9yrs
  • Terry Klebe (64yo)

    Director

    • Tenure: 1.8yrs
    • Compensation: US$249.99k
  • Dave Calhoun (61yo)

    Chairman of the Board

    • Tenure: 0yrs
  • Julia Kahr (40yo)

    Director

    • Tenure: 2.1yrs
  • Ivo Jurek (54yo)

    CEO & Director

    • Tenure: 0yrs
    • Compensation: US$2.53m
  • James Ireland (64yo)

    Director

    • Tenure: 0.9yrs
    • Compensation: US$120.82k
  • Stephanie Mains (51yo)

    Director

    • Tenure: 0.7yrs

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$2.834b
  • Shares outstanding: 290.11m
  • 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 ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/20 00:31
End of Day Share Price2019/10/18 00:00
Earnings2019/06/29
Annual Earnings2018/12/29


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.