NYSE:RST

Stock Analysis Report

Executive Summary

Rosetta Stone Inc., together with its subsidiaries, provides technology-based learning products in the United States and internationally.

Snowflake

Fundamentals

Imperfect balance sheet with concerning outlook.


Similar Companies

Share Price & News

How has Rosetta Stone's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

8.9%

RST

-0.02%

US Entertainment

0.4%

US Market


1 Year Return

-8.8%

RST

1.3%

US Entertainment

6.9%

US Market

Return vs Industry: RST underperformed the US Entertainment industry which returned 1.3% over the past year.

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


Shareholder returns

RSTIndustryMarket
7 Day8.9%-0.02%0.4%
30 Day1.5%-2.6%-1.1%
90 Day-18.3%-4.4%-0.5%
1 Year-8.8%-8.8%2.1%1.3%9.3%6.9%
3 Year153.1%153.1%52.6%47.7%45.8%36.4%
5 Year130.5%130.5%90.3%78.3%62.9%45.1%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Rosetta Stone undervalued compared to its fair value and its price relative to the market?


In this section, we usually try to help investors determine whether Rosetta Stone is trading at an attractive price based on the cash flow it is expected to produce in the future. But as Rosetta Stone has not provided consistent financial data, and the stock also has no analyst forecast or coverage, its intrinsic value cannot be reliably calculated by extrapolating past data or using analyst consensus cash flow predictions.

This is quite a rare situation as 89% of companies covered by Simply Wall St do have a valuation analysis.


Next Steps

  • Take a look at our analysis of RST’s management and see if the CEO’s compensation is within a reasonable range, who is on the board and if insiders have been trading lately.
  • When valuing a company like this, investors focus more on how they perceive the size of the opportunity, the company's ability to deliver and scale, and the strength of the team. While we are not analysing this type of data at the moment, if you don’t know where to start, we recommend reading through Rosetta Stone regulatory filings.
  • Explore potentially undervalued companies in the Media industry.

Future Growth

How is Rosetta Stone forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

86.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: RST is forecast to remain unprofitable over the next 3 years.

Earnings vs Market: RST is forecast to remain unprofitable over the next 3 years.

High Growth Earnings: RST is forecast to remain unprofitable over the next 3 years.

Revenue vs Market: RST's revenue (17.4% per year) is forecast to grow faster than the US market (7.2% per year).

High Growth Revenue: RST's revenue (17.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: Insufficient data to determine if RST's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Rosetta Stone performed over the past 5 years?

38.4%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: RST is unprofitable, but has reduced losses over the past 5 years at a rate of 38.4% per year.

Accelerating Growth: Unable to compare RST's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: RST is unprofitable, making it difficult to compare its past year earnings growth to the Entertainment industry (21.5%).


Return on Equity

High ROE: RST's liabilities exceed its assets, so it is difficult to calculate its Return on Equity.


Return on Assets

ROA vs Industry: RST is currently unprofitable, so its Return on Assets is negative.


Return on Capital Employed

ROCE Improving: RST is currently unprofitable, so its Return on Capital Employed is negative.


Next Steps

Financial Health

How is Rosetta Stone's financial position?


Financial Position Analysis

Short Term Liabilities: RST has negative shareholder equity, which is a more serious situation than short term assets not covering short term liabilities.

Long Term Liabilities: RST has negative shareholder equity, which is a more serious situation than short term assets not covering long term liabilities.


Debt to Equity History and Analysis

Debt Level: RST has negative shareholder equity, which is a more serious situation than a high debt level.

Reducing Debt: RST's has negative shareholder equity, so we do not need to check if its debt has reduced over time.


Balance Sheet

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

Debt Coverage by Assets: RST has negative shareholder equity (liabilities exceed assets) therefore debt is not covered by short term assets.


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: RST has sufficient cash runway for more than a year based on its current free cash flow.

Forecast Cash Runway: RST has sufficient cash runway for 1.571407 years if free cash flow continues to reduce at historical rates of -48.7% each year.


Next Steps

Dividend

What is Rosetta Stone's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.7%industryaverage1.3%forecastin3Yearsn/a

Current dividend yield vs market & industry


Stability and Growth of Payments

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

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

Growing Dividend: Insufficient data to determine if RST'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 RST'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 Rosetta Stone's salary, the management and board of directors tenure and is there insider trading?

1.7yrs

Average management tenure


CEO

A. Hass (53yo)

3.5yrs

Tenure

US$2,508,000

Compensation

Mr. A. John Hass, III, has been the Chief Executive Officer of Rosetta Stone Inc. since April 1, 2016 and was its President since April 1, 2016. Mr. Hass served as an Interim Chief Executive Officer and In ...


CEO Compensation Analysis

Compensation vs. Market: A.'s total compensation ($USD2.51M) is about average for companies of similar size in the US market ($USD1.79M).

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


Management Age and Tenure

1.7yrs

Average Tenure

55yo

Average Age

Experienced Management: RST's management team is not considered experienced ( 1.7 years average tenure), which suggests a new team.


Board Age and Tenure

3.5yrs

Average Tenure

62yo

Average Age

Experienced Board: RST's board of directors are considered experienced (3.5 years average tenure).


Insider Trading

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


Recent Insider Transactions

SellUS$200,46413 Sep 19
Laurence Franklin
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares10,181
Max PriceUS$19.69
BuyUS$9,14521 Aug 19
George Logue
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares500
Max PriceUS$18.29
SellUS$107,49923 May 19
Sonia Galindo
EntityIndividual
Shares4,496
Max PriceUS$23.91
SellUS$2,742,35817 May 19
Nierenberg Investment Management Company, Inc.
EntityCompany
Shares107,141
Max PriceUS$25.75
SellUS$2,425,38514 May 19
Nierenberg Investment Management Company, Inc.
EntityCompany
Shares92,859
Max PriceUS$26.38
SellUS$2,033,27315 Mar 19
Nierenberg Investment Management Company, Inc.
EntityCompany
Shares88,190
Max PriceUS$23.49
SellUS$22,98014 Mar 19
Matthew Hulett
EntityIndividual
Role
Co-President
Co-President & President of Language
Shares1,000
Max PriceUS$22.98
SellUS$237,56614 Mar 19
Nicholas Gaehde
EntityIndividual
Role
Co-President
Co-President & President of Literacy
Shares10,092
Max PriceUS$23.54
SellUS$72,02713 Mar 19
M. Hartford
EntityIndividual
Role
Chief Accounting Officer
VP, Controller & Principal Accounting Officer
Shares3,304
Max PriceUS$21.80

Ownership Breakdown


Management Team

  • Matt Hulett (48yo)

    Co-President & President of Language

    • Tenure: 0.8yrs
    • Compensation: US$1.08m
  • Nick Gaehde (58yo)

    Co-President & President of Literacy

    • Tenure: 0.8yrs
    • Compensation: US$958.04k
  • Sean Klein

    VP & Deputy General Counsel

    • Tenure: 0yrs
  • A. Hass (53yo)

    Chairman & CEO

    • Tenure: 3.5yrs
    • Compensation: US$2.51m
  • Andrea Riggs

    Senior Director of Communications

    • Tenure: 0yrs
  • Tom Pierno (57yo)

    Chief Financial Officer

    • Tenure: 7.4yrs
    • Compensation: US$976.00k
  • M. Hartford

    VP, Controller & Principal Accounting Officer

    • Tenure: 4.4yrs
  • Liz Brooke

    Chief Learning Officer

    • Tenure: 1.7yrs
  • Jerry Huang

    Senior Vice President of Language International Expansion Strategy

    • Tenure: 1.2yrs

Board Members

  • Pat Gross (74yo)

    Lead Independent Director

    • Tenure: 3.5yrs
    • Compensation: US$165.00k
  • George Logue (68yo)

    Independent Director

    • Tenure: 1.6yrs
    • Compensation: US$172.88k
  • Dem Nierenberg (66yo)

    Independent Director

    • Tenure: 4.5yrs
    • Compensation: US$160.00k
  • Steve Yankovich (58yo)

    Independent Director

    • Tenure: 5yrs
    • Compensation: US$152.68k
  • Aedhmar Hynes (53yo)

    Director

    • Tenure: 0.2yrs
  • Laurence Franklin (67yo)

    Independent Director

    • Tenure: 13.4yrs
    • Compensation: US$170.00k
  • Jessie Woolley-Wilson (56yo)

    Independent Director

    • Tenure: 2yrs
    • Compensation: US$150.00k
  • A. Hass (53yo)

    Chairman & CEO

    • Tenure: 3.5yrs
    • Compensation: US$2.51m

Company Information

Rosetta Stone Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Rosetta Stone Inc.
  • Ticker: RST
  • Exchange: NYSE
  • Founded: 1992
  • Industry: Interactive Home Entertainment
  • Sector: Media
  • Market Cap: US$446.805m
  • Shares outstanding: 24.02m
  • Website: https://www.rosettastone.com

Number of Employees


Location

  • Rosetta Stone Inc.
  • 1621 North Kent Street
  • Suite 1200
  • Arlington
  • Virginia
  • 22209
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
RSTNYSE (New York Stock Exchange)YesCommon StockUSUSDApr 2009
RS8DB (Deutsche Boerse AG)YesCommon StockDEEURApr 2009

Biography

Rosetta Stone Inc., together with its subsidiaries, provides technology-based learning products in the United States and internationally. It operates through three segments: Literacy, E&E Language, and Con ...


Company Analysis and Financial Data Status

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