OTCPK:ECOG.F

Stock Analysis Report

Executive Summary

Econocom Group SE provides digital transformation solutions.

Rewards

Trading at 0.3% below its fair value

Earnings are forecast to grow 10.28% per year

Risk Analysis

Debt is not well covered by operating cash flow

Unstable dividend track record

Large one-off items impacting financial results



Snowflake Analysis

Good value average dividend payer.


Similar Companies

Capgemini

ENXTPA:CAP

Share Price & News

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


Latest Share Price and Events

Stable Share Price: ECOG.F has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0%

ECOG.F

1.7%

US IT

0.6%

US Market


1 Year Return

n/a

ECOG.F

42.2%

US IT

24.6%

US Market

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

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


Shareholder returns

ECOG.FIndustryMarket
7 Day0%1.7%0.6%
30 Day0%7.1%3.0%
90 Day-1.3%14.5%10.6%
1 Yearn/a43.7%42.2%27.3%24.6%
3 Yearn/a109.6%100.6%50.5%40.8%
5 Yearn/a161.6%138.3%78.9%59.1%

Price Volatility Vs. Market

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


Simply Wall St News

No news available

Valuation

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

0.3%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: ECOG.F ($2.56) is trading below our estimate of fair value ($2.57)

Significantly Below Fair Value: ECOG.F is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: ECOG.F is good value based on its PE Ratio (10.9x) compared to the IT industry average (32x).

PE vs Market: ECOG.F is good value based on its PE Ratio (10.9x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: ECOG.F is poor value based on its PEG Ratio (1.1x)


Price to Book Ratio

PB vs Industry: ECOG.F is good value based on its PB Ratio (1.4x) compared to the US IT industry average (4.2x).


Next Steps

Future Growth

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

10.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ECOG.F's forecast earnings growth (10.3% per year) is above the savings rate (1.7%).

Earnings vs Market: ECOG.F's earnings (10.3% per year) are forecast to grow slower than the US market (14.3% per year).

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

Revenue vs Market: ECOG.F's revenue (1.2% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: ECOG.F's revenue (1.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ECOG.F's Return on Equity is forecast to be low in 3 years time (15.9%).


Next Steps

Past Performance

How has Econocom Group performed over the past 5 years?

4.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ECOG.F has a large one-off loss of €31.9M impacting its June 30 2019 financial results.

Growing Profit Margin: ECOG.F's current net profit margins (1.6%) are lower than last year (2%).


Past Earnings Growth Analysis

Earnings Trend: ECOG.F's earnings have grown by 4.4% per year over the past 5 years.

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

Earnings vs Industry: ECOG.F had negative earnings growth (-13.9%) over the past year, making it difficult to compare to the IT industry average (16.2%).


Return on Equity

High ROE: ECOG.F's Return on Equity (11%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Econocom Group's financial position?


Financial Position Analysis

Short Term Liabilities: ECOG.F's short term assets (€2.1B) exceed its short term liabilities (€1.8B).

Long Term Liabilities: ECOG.F's short term assets (€2.1B) exceed its long term liabilities (€747.6M).


Debt to Equity History and Analysis

Debt Level: ECOG.F's debt to equity ratio (199.9%) is considered high.

Reducing Debt: ECOG.F's debt to equity ratio has increased from 96% to 199.9% over the past 5 years.

Debt Coverage: ECOG.F's debt is not well covered by operating cash flow (13.5%).

Interest Coverage: ECOG.F's interest payments on its debt are well covered by EBIT (10.8x coverage).


Balance Sheet

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

Debt Coverage by Assets: ECOG.F's debt is covered by short term assets (assets are 2.3x debt).


Next Steps

Dividend

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

5.45%

Current Dividend Yield


Dividend Yield vs Market

company5.4%marketbottom25%1.4%markettop25%3.7%industryaverage1.2%forecastin3Years4.2%

Current dividend yield vs market & industry

Notable Dividend: ECOG.F's dividend (5.41%) is higher than the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: ECOG.F's dividend (5.41%) is in the top 25% of dividend payers in the US market (3.66%)


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, ECOG.F has been paying a dividend for less than 10 years.

Growing Dividend: ECOG.F has only been paying a dividend for 2 years, and since then payments have not increased.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (59%), ECOG.F's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: ECOG.F's dividends in 3 years are forecast to be well covered by earnings (25.4% payout ratio).


Next Steps

Management

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

1.0yrs

Average management tenure


CEO

Jean-Louis Bouchard 0

1yrs

Tenure

0

Mr. Jean-Louis Bouchard serves as the Chairman of Econocom Group SE and has been its Chief Executive Officer since March 2, 2004. Mr. Bouchard also serves as Chairman of Econocom International NV, the majo ...


Management Age and Tenure

1.0yrs

Average Tenure

39yo

Average Age

Experienced Management: ECOG.F's management team is not considered experienced ( 1 years average tenure), which suggests a new team.


Board Age and Tenure

8.1yrs

Average Tenure

63yo

Average Age

Experienced Board: ECOG.F's board of directors are considered experienced (8.1 years average tenure).


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

  • Jean-Louis Bouchard

    Chairman & CEO

    • Tenure: 1yrs
  • Bruno Grossi (61yo)

    MD of Strategy & Acquisitions and Executive Director

    • Martine Bayens

      Executive Director & MD of Satellites

      • Robert Bouchard

        Vice Chairman

        • Sébastien Musset (39yo)

          Executive Director & MD of Transformation & Resources

          • Laura Barracco

            Deputy Managing Director of Technology Management & Financing Division

            • Tenure: 3.2yrs
          • Julie Verlingue (38yo)

            Group Deputy Chief Executive Officer

            • Tenure: 1.7yrs
          • Stéphane Pailler

            Head of Internal Audit

            • Laurent Roudil

              Managing Director of Services France & Deputy Managing Director France

              • Angel Benguigui

                Group Finance Director

                • Tenure: 0.8yrs

              Board Members

              • Walter Butler (63yo)

                Independent Director

                • Rafi Kouyoumdjian

                  Non-Executive Director

                  • Tenure: 8.1yrs
                • Jean-Philippe Roesch

                  Non-Executive Director

                  • Gaspard Dürrleman

                    Non Executive Director

                    • Tenure: 8.1yrs
                  • Jean-Louis Bouchard

                    Chairman & CEO

                    • Tenure: 1yrs
                  • Jean Mounet (74yo)

                    Independent Director

                    • Tenure: 8.1yrs
                  • Bruno Grossi (61yo)

                    MD of Strategy & Acquisitions and Executive Director

                    • Robert Bouchard

                      Vice Chairman

                      • Véronique di Benedetto

                        Non-Executive Director

                        • Tenure: 8.1yrs
                      • Philippe Capron

                        Independent Director

                        Company Information

                        Econocom Group SE's company bio, employee growth, exchange listings and data sources


                        Key Information

                        • Name: Econocom Group SE
                        • Ticker: ECOG.F
                        • Exchange: OTCPK
                        • Founded: 1982
                        • Industry: IT Consulting and Other Services
                        • Sector: Software
                        • Market Cap: €488.823m
                        • Listing Market Cap: €541.993m
                        • Shares outstanding: 221.99m
                        • Website: https://www.econocom.com

                        Number of Employees


                        Location

                        • Econocom Group SE
                        • 40, quai de Dion Bouton
                        • Puteaux
                        • Ile-de-France
                        • 92800
                        • France

                        Listings

                        TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
                        ECONBENXTBR (Euronext Brussels)YesBearer and Registered SharesBEEURMay 2017
                        1e+91BST (Boerse-Stuttgart)YesBearer and Registered SharesDEEURMay 2017
                        0RPXLSE (London Stock Exchange)YesBearer and Registered SharesGBEURMay 2017
                        ECOG.FOTCPK (Pink Sheets LLC)YesBearer and Registered SharesUSUSDMay 2017
                        ECONBBBATS-CHIXE (BATS 'Chi-X Europe')YesBearer and Registered SharesGBEURMay 2017

                        Biography

                        Econocom Group SE provides digital transformation solutions. It operates through three segments: Technology Management & Financing, Products & Solutions, and Services. The Technology Management & Financing segment offers financing solutions for the administrative and financial management of a business's ICT and digital assets. The Products & Solutions segment provides design and rollout services of architecture solutions; and sells hardware and software, PCs, tablets, servers, printers, licenses, digital devices and signage, video-conference rooms, smart buildings, etc., as well as offers systems integration services. The Services segment provides consultancy, infrastructure management, application development, and digital solution integration services. It also offers Wi-Fi and professional mobility solutions for retail and logistics sectors. The company serves healthcare, B2C, education, and industry sectors. It operates in 19 countries, including Europe, Morocco, Brazil, Mexico, Canada, and the United States. The company sells its products and services under the Econocom brand name. Econocom Group was founded in 1982 and is headquartered in Puteaux, France. 


                        Company Analysis and Financial Data Status

                        All financial data provided by Standard & Poor's Capital IQ.
                        DataLast Updated (UTC time)
                        Company Analysis2020/01/23 01:06
                        End of Day Share Price2019/12/05 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.