NasdaqCM:GVP

Stock Analysis Report

Executive Summary

GSE Systems, Inc. provides simulation, training, and engineering solutions to the power and process industries in the United States, Asia, Europe, and internationally.

Rewards

Trading at 86.8% below its fair value

Earnings are forecast to grow 105.41% per year

Risk Analysis

Highly volatile share price over past 3 months

Shareholders have been diluted in the past year

Does not have a meaningful market cap ($32M)



Snowflake Analysis

Adequate balance sheet with reasonable growth potential.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

11.9%

GVP

1.7%

US Software

1.2%

US Market


1 Year Return

-39.4%

GVP

40.0%

US Software

24.2%

US Market

Return vs Industry: GVP underperformed the US Software industry which returned 39.8% over the past year.

Return vs Market: GVP underperformed the US Market which returned 24.7% over the past year.


Shareholder returns

GVPIndustryMarket
7 Day11.9%1.7%1.2%
30 Day22.5%6.5%3.5%
90 Day18.5%21.0%11.7%
1 Year-39.4%-39.4%41.2%40.0%26.9%24.2%
3 Year-41.5%-41.5%143.7%134.0%53.0%43.2%
5 Year13.3%13.3%201.4%179.9%75.3%56.0%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is GSE Systems 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: GVP ($1.6) is trading below our estimate of fair value ($12.14)

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


Price To Earnings Ratio

PE vs Industry: GVP is unprofitable, so we can't compare its PE Ratio to the Software industry average.

PE vs Market: GVP is unprofitable, so we can't compare its PE Ratio to the US market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate GVP's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: GVP is good value based on its PB Ratio (1.2x) compared to the US Software industry average (5.9x).


Next Steps

Future Growth

How is GSE Systems forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

105.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: GVP is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (1.7%).

Earnings vs Market: GVP is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: GVP's is expected to become profitable in the next 3 years.

Revenue vs Market: GVP's revenue (13.8% per year) is forecast to grow faster than the US market (7.5% per year).

High Growth Revenue: GVP's revenue (13.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: GVP's Return on Equity is forecast to be low in 3 years time (8.1%).


Next Steps

Past Performance

How has GSE Systems performed over the past 5 years?

37.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: GVP is currently unprofitable.

Growing Profit Margin: GVP is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: GVP is unprofitable, but has reduced losses over the past 5 years at a rate of 37.1% per year.

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

Earnings vs Industry: GVP is unprofitable, making it difficult to compare its past year earnings growth to the Software industry (20.8%).


Return on Equity

High ROE: GVP has a negative Return on Equity (-18.11%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is GSE Systems's financial position?


Financial Position Analysis

Short Term Liabilities: GVP's short term assets ($27.0M) exceed its short term liabilities ($18.2M).

Long Term Liabilities: GVP's short term assets ($27.0M) exceed its long term liabilities ($19.2M).


Debt to Equity History and Analysis

Debt Level: GVP's debt to equity ratio (75.2%) is considered high.

Reducing Debt: GVP's debt to equity ratio has increased from 0.01% to 75.2% over the past 5 years.


Balance Sheet

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

Debt Coverage by Assets: GVP's debt is covered by short term assets (assets are 1.4x debt).


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: Whilst unprofitable GVP has sufficient cash runway for more than 3 years if it maintains its current positive free cash flow level.

Forecast Cash Runway: GVP is unprofitable but has sufficient cash runway for more than 3 years, even with free cash flow being positive and shrinking by -72.9% per year.


Next Steps

Dividend

What is GSE Systems'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

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

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


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if GVP's dividends per share have been stable in the past.

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

3.9yrs

Average management tenure


CEO

Kyle Loudermilk (51yo)

4.4yrs

Tenure

US$989,499

Compensation

Mr. Kyle J. Loudermilk has been the Chief Executive Officer and President of GSE Systems Inc., since August 3, 2015. Mr. Loudermilk served as a Vice President of Product Management at Ellucian, Inc. from 2 ...


CEO Compensation Analysis

Compensation vs Market: Kyle's total compensation ($USD989.50K) is above average for companies of similar size in the US market ($USD519.76K).

Compensation vs Earnings: Kyle's compensation has increased whilst the company is unprofitable.


Management Age and Tenure

3.9yrs

Average Tenure

52yo

Average Age

Experienced Management: GVP's management team is considered experienced (3.9 years average tenure).


Board Age and Tenure

2.7yrs

Average Tenure

61yo

Average Age

Experienced Board: GVP's board of directors are not considered experienced ( 2.7 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.


Recent Insider Transactions

BuyUS$11,22707 Jun 19
Kyle Loudermilk
EntityIndividual
Role
Chief Executive Officer
President
Shares5,103
Max PriceUS$2.20
BuyUS$230,00022 May 19
Kyle Loudermilk
EntityIndividual
Role
Chief Executive Officer
President
Shares100,000
Max PriceUS$2.30

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 2.2%.


Management Team

  • Gill Grady (62yo)

    Senior Vice President of Marketing & Business Development

    • Compensation: US$243.12k
  • Bahram Meyssami (57yo)

    Chief Technology Officer

    • Tenure: 4.1yrs
    • Compensation: US$231.16k
  • Kyle Loudermilk (51yo)

    President

    • Tenure: 4.4yrs
    • Compensation: US$989.50k
  • Emmett Pepe (54yo)

    Chief Financial Officer & Treasurer

    • Tenure: 3.5yrs
    • Compensation: US$570.03k
  • Paul Abbott (52yo)

    President of Hyperspring LLC & Absolute Consulting Inc

    • Dan Pugh (52yo)

      Chief Legal and Risk Officer

      • Tenure: 3.9yrs
    • Ravi Khanna (42yo)

      Senior Vice President of Professional Services

      • Tenure: 1.9yrs

    Board Members

    • James Beasley (67yo)

      Independent Director

      • Tenure: 1.6yrs
      • Compensation: US$38.12k
    • Jack Fuller (68yo)

      Independent Chairman of the Board

      • Tenure: 2yrs
      • Compensation: US$53.12k
    • Kyle Loudermilk (51yo)

      President

      • Tenure: 4.4yrs
      • Compensation: US$989.50k
    • Suresh Sundaram (53yo)

      Independent Director

      • Tenure: 3.3yrs
      • Compensation: US$49.37k
    • Jim Stanker (61yo)

      Independent Director

      • Tenure: 3.4yrs
      • Compensation: US$53.12k
    • Kathryn Gardner

      Independent Director

      • Tenure: 0.08yrs

    Company Information

    GSE Systems, Inc.'s company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: GSE Systems, Inc.
    • Ticker: GVP
    • Exchange: NasdaqCM
    • Founded: 1994
    • Industry: Application Software
    • Sector: Software
    • Market Cap: US$36.282m
    • Shares outstanding: 20.01m
    • Website: https://www.gses.com

    Number of Employees


    Location

    • GSE Systems, Inc.
    • 1332 Londontown Boulevard
    • Suite 200
    • Sykesville
    • Maryland
    • 21784
    • United States

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    GVPNasdaqCM (Nasdaq Capital Market)YesCommon StockUSUSDJul 1995
    GSEDB (Deutsche Boerse AG)YesCommon StockDEEURJul 1995

    Biography

    GSE Systems, Inc. provides simulation, training, and engineering solutions to the power and process industries in the United States, Asia, Europe, and internationally. It operates through two segments, Performance Improvement Solutions and Nuclear Industry Training and Consulting. The Performance Improvement Solutions segment provides various simulation products, engineering services, and operation training systems for the nuclear, fossil fuel power generation, and process industries. The Nuclear Industry Training and Consulting segment offers instructors, procedure writers, project managers, work management specialists, and planners and training material developers for the nuclear power industry. The company markets its products and services through a network of direct sales staff, agents and representatives, and strategic alliance partners. GSE Systems, Inc. was founded in 1994 and is headquartered in Sykesville, Maryland. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/20 23:39
    End of Day Share Price2020/01/17 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.