OTCPK:DOTD.F

Stock Analysis Report

Executive Summary

dotdigital Group Plc provides intuitive software as a service (SaaS) and managed services to digital marketing professionals worldwide.

Rewards

PE ratio (26.9x) is below the Software industry average (47.3x)

Earnings are forecast to grow 7.24% per year

Earnings grew by 37% over the past year

Risk Analysis

Shares are highly illiquid

High level of non-cash earnings



Snowflake Analysis

Solid track record with excellent balance sheet.

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

22.2%

DOTD.F

0.8%

US Software

0.6%

US Market


1 Year Return

n/a

DOTD.F

40.0%

US Software

24.6%

US Market

Return vs Industry: Insufficient data to determine how DOTD.F performed against the US Software industry.

Return vs Market: Insufficient data to determine how DOTD.F performed against the US Market.


Shareholder returns

DOTD.FIndustryMarket
7 Day22.2%0.8%0.6%
30 Day22.2%6.0%3.0%
90 Dayn/a17.3%10.6%
1 Yearn/a41.3%40.0%27.3%24.6%
3 Year97.4%97.4%139.7%130.2%50.5%40.8%
5 Yearn/a220.7%198.4%78.9%59.1%

Price Volatility Vs. Market

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


Simply Wall St News

No news available

Valuation

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

31.07x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: DOTD.F ($1.26) is trading above our estimate of fair value ($0.54)

Significantly Below Fair Value: DOTD.F is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: DOTD.F is good value based on its PE Ratio (26.9x) compared to the Software industry average (47.3x).

PE vs Market: DOTD.F is poor value based on its PE Ratio (26.9x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: DOTD.F is poor value based on its PEG Ratio (3.7x)


Price to Book Ratio

PB vs Industry: DOTD.F is overvalued based on its PB Ratio (7.1x) compared to the US Software industry average (5.9x).


Next Steps

Future Growth

How is dotdigital Group forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

9.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: DOTD.F's forecast earnings growth (7.2% per year) is above the savings rate (1.7%).

Earnings vs Market: DOTD.F's earnings (7.2% per year) are forecast to grow slower than the US market (14.3% per year).

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

Revenue vs Market: DOTD.F's revenue (13.3% per year) is forecast to grow faster than the US market (7.5% per year).

High Growth Revenue: DOTD.F's revenue (13.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: DOTD.F's Return on Equity is forecast to be high in 3 years time (22.8%)


Next Steps

Past Performance

How has dotdigital Group performed over the past 5 years?

20.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: DOTD.F has a high level of non-cash earnings.

Growing Profit Margin: DOTD.F's current net profit margins (25.8%) are higher than last year (21.7%).


Past Earnings Growth Analysis

Earnings Trend: DOTD.F's earnings have grown significantly by 20.8% per year over the past 5 years.

Accelerating Growth: DOTD.F's earnings growth over the past year (37%) exceeds its 5-year average (20.8% per year).

Earnings vs Industry: DOTD.F earnings growth over the past year (37%) exceeded the Software industry 20.8%.


Return on Equity

High ROE: DOTD.F's Return on Equity (26.5%) is considered high.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is dotdigital Group's financial position?


Financial Position Analysis

Short Term Liabilities: DOTD.F's short term assets (£31.5M) exceed its short term liabilities (£11.1M).

Long Term Liabilities: DOTD.F's short term assets (£31.5M) exceed its long term liabilities (£1.4M).


Debt to Equity History and Analysis

Debt Level: DOTD.F's debt to equity ratio (0.01%) is considered satisfactory.

Reducing Debt: Insufficient data to determine if DOTD.F's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: DOTD.F's debt is well covered by operating cash flow (245720%).

Interest Coverage: DOTD.F earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet

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

Debt Coverage by Assets: DOTD.F's debt is covered by short term assets (assets are 6308.4x debt).


Next Steps

Dividend

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

0.59%

Current Dividend Yield


Dividend Yield vs Market

company0.6%marketbottom25%1.4%markettop25%3.7%industryaverage1.3%forecastin3Years0.8%

Current dividend yield vs market & industry

Notable Dividend: DOTD.F's dividend (0.68%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: DOTD.F's dividend (0.68%) is low compared to the top 25% of dividend payers in the US market (3.66%).


Stability and Growth of Payments

Stable Dividend: DOTD.F is not paying a notable dividend for the US market, therefore no need to check if payments are stable.

Growing Dividend: DOTD.F is not paying a notable dividend for the US market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: DOTD.F is not paying a notable dividend for the US market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of DOTD.F'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 dotdigital Group's salary, the management and board of directors tenure and is there insider trading?

3.5yrs

Average management tenure


CEO

Milan Patel (35yo)

3.5yrs

Tenure

UK£749,000

Compensation

Mr. Milan Patel, ACCA, ACSI, FCCA, serves as President of dotDigital Group Plc. Mr. Patel has been the Chief Executive Officer of dotDigital Group Plc since July 20, 2016. Mr. Patel served as the Chief Fin ...


CEO Compensation Analysis

Compensation vs Market: Milan's total compensation ($USD973.93K) is below average for companies of similar size in the US market ($USD1.70M).

Compensation vs Earnings: Milan's compensation has increased by more than 20% in the past year.


Management Age and Tenure

3.5yrs

Average Tenure

Experienced Management: DOTD.F's management team is considered experienced (3.5 years average tenure).


Board Age and Tenure

1.9yrs

Average Tenure

43yo

Average Age

Experienced Board: DOTD.F's board of directors are not considered experienced ( 1.4 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 not been meaningfully diluted in the past year.


Management Team

  • Paraag Amin (39yo)

    CFO & Director

    • Tenure: 1.9yrs
    • Compensation: UK£363.00k
  • Milan Patel (35yo)

    CEO, President & Executive Director

    • Tenure: 3.5yrs
    • Compensation: UK£749.00k
  • Peter Duffy

    Senior Business Development Manager

    • Tenure: 5.8yrs
  • Steve Shaw

    Chief Technology Officer

    • Phil Draper

      Chief Marketing Officer

      • George Kasparian

        Company Secretary


        Board Members

        • Mike O'Leary (66yo)

          Non-Executive Chairman

          • Boris Huard (47yo)

            Independent Non-Executive Director

            • Tenure: 0.8yrs
            • Compensation: UK£9.00k
          • Paraag Amin (39yo)

            CFO & Director

            • Tenure: 1.9yrs
            • Compensation: UK£363.00k
          • Milan Patel (35yo)

            CEO, President & Executive Director

            • Tenure: 3.5yrs
            • Compensation: UK£749.00k

          Company Information

          dotdigital Group Plc's company bio, employee growth, exchange listings and data sources


          Key Information

          • Name: dotdigital Group Plc
          • Ticker: DOTD.F
          • Exchange: OTCPK
          • Founded: 1999
          • Industry: Application Software
          • Sector: Software
          • Market Cap: UK£341.081m
          • Listing Market Cap: UK£448.125m
          • Shares outstanding: 297.89m
          • Website: https://www.dotdigitalgroup.com

          Number of Employees


          Location

          • dotdigital Group Plc
          • No. 1 London Bridge
          • London
          • Greater London
          • SE1 9BG
          • United Kingdom

          Listings

          TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
          DOTDAIM (London Stock Exchange AIM Market)YesNew Ordinary SharesGBGBPFeb 2011
          DOTD.FOTCPK (Pink Sheets LLC)YesNew Ordinary SharesUSUSDFeb 2011
          3DODB (Deutsche Boerse AG)YesNew Ordinary SharesDEEURFeb 2011

          Biography

          dotdigital Group Plc provides intuitive software as a service (SaaS) and managed services to digital marketing professionals worldwide. The company offers Engagement Cloud, a SaaS-based cross-channel marketing automation platform that enables companies to create, test, and send data-triggered campaigns and communications across channels, such as email, SMS, social, push, etc. The company was founded in 1999 and is headquartered in London, the United Kingdom. 


          Company Analysis and Financial Data Status

          All financial data provided by Standard & Poor's Capital IQ.
          DataLast Updated (UTC time)
          Company Analysis2020/01/23 00:52
          End of Day Share Price2020/01/22 00:00
          Earnings2019/06/30
          Annual Earnings2019/06/30


          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.