Huge Group (JSE:HUG) - Share price, News & Analysis

HUG fundamental analysis
Snowflake Score
Valuation	1/6
Future Growth	0/6
Past Performance	1/6
Financial Health	4/6
Dividends	0/6

HUG Overview

Huge Group Limited, an investment holding company, provides voice connectivity, messaging, and telephone management services in South Africa, Botswana, Lesotho, Namibia, Estwatini, and Zambia.

Risk Analysis

Volatile share price over the past 3 months

Large one-off items impacting financial results

Profit margins (8.2%) are lower than last year (19.3%)

Does not have a meaningful market cap (ZAR578M)

Price History & Performance

Summary of all time highs, changes and price drops for Huge Group
Historical stock prices
Current Share Price	R3.49
52 Week High	R3.11
52 Week Low	R6.90
Beta	0.10
1 Month Change	-4.12%
3 Month Change	-32.63%
1 Year Change	-18.84%
3 Year Change	-61.86%
5 Year Change	-48.68%
Change since IPO	12.58%

Recent News & Updates

Jul 22

Huge Group's (JSE:HUG) Sluggish Earnings Might Be Just The Beginning Of Its Problems

A lackluster earnings announcement from Huge Group Limited ( JSE:HUG ) last week didn't sink the stock price. However...

Jul 13

Is Huge Group (JSE:HUG) Using Too Much Debt?

Legendary fund manager Li Lu (who Charlie Munger backed) once said, 'The biggest investment risk is not the volatility...

Shareholder Returns

	HUG	ZA Telecom	ZA Market
7D	0.3%	0.09%	-0.03%
1Y	-18.8%	10.4%	19.0%

Return vs Industry: HUG underperformed the ZA Telecom industry which returned 10.3% over the past year.

Return vs Market: HUG underperformed the ZA Market which returned 19% over the past year.

Price Volatility

Is HUG's price volatile compared to industry and market?
HUG volatility
HUG Beta	0.10
Industry Beta	0.45
Market Beta	1

Stable Share Price: HUG is more volatile than 75% of ZA stocks over the past 3 months, typically moving +/- 10% a week.

Volatility Over Time: HUG's weekly volatility (10%) has been stable over the past year, but is still higher than 75% of ZA stocks.

About the Company

Founded	Employees	CEO	Website
1993	315	James Herbst	https://www.hugegroup.com

Huge Group Limited, an investment holding company, provides voice connectivity, messaging, and telephone management services in South Africa, Botswana, Lesotho, Namibia, Estwatini, and Zambia. It offers fixed location telephony services; payment solutions; and connectivity to the card payment terminals of merchants, payment service providers, and the commercial banks using managed and dual SIM connectivity over GSM data networks; and other services, such as ATMs, integrated points-of-sale, medical/script verifications, telemetry applications, micro-lending applications, and cash vaults, as well as supplies NEC, Yealink and Yeastar voice, video, and CCTV products. The company also provides network service and data communications, including marketing and sale of internet data services, managed network solutions, branch connectivity, hosting services, and website and system development; develops and licenses software for real time, permission based, and targeted advertising to mobile phones, as well as messaging software and systems; and develops accounting, billing, and rating software suites, as well as Webatar mobile application.

Huge Group Fundamentals Summary

How do Huge Group's earnings and revenue compare to its market cap?
HUG fundamental statistics
Market Cap	R578.21m
Earnings (TTM)	R38.57m
Revenue (TTM)	R469.86m

15.0x

P/E Ratio

1.2x

P/S Ratio

Is HUG overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
HUG income statement (TTM)
Revenue	R469.86m
Cost of Revenue	R208.38m
Gross Profit	R261.48m
Expenses	R222.91m
Earnings	R38.57m

Last Reported Earnings

Feb 28, 2021

Next Earnings Date

Nov 30, 2021

Earnings per share (EPS)	0.23
Gross Margin	55.65%
Net Profit Margin	8.21%
Debt/Equity Ratio	17.1%

How did HUG perform over the long term?

See historical performance and comparison

Valuation

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

14.99x

Price to Earnings (PE) ratio

Share Price vs. Fair Value

Below Fair Value: Insufficient data to calculate HUG's fair value to establish if it is undervalued.

Significantly Below Fair Value: Insufficient data to calculate HUG's fair value to establish if it is undervalued.

Price To Earnings Ratio

PE vs Industry: HUG is poor value based on its PE Ratio (15x) compared to the African Telecom industry average (8x).

PE vs Market: HUG is poor value based on its PE Ratio (15x) compared to the ZA market (11.3x).

Price to Earnings Growth Ratio

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

Price to Book Ratio

PB vs Industry: HUG is good value based on its PB Ratio (0.6x) compared to the XF Telecom industry average (0.7x).

Future Growth

How is Huge Group forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

8.8%

Forecasted Telecom industry annual growth in earnings

In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as Huge Group has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.

Past Performance

How has Huge Group performed over the past 5 years?

18.7%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: HUG has a large one-off gain of ZAR9.0M impacting its February 28 2021 financial results.

Growing Profit Margin: HUG's current net profit margins (8.2%) are lower than last year (19.3%).

Past Earnings Growth Analysis

Earnings Trend: HUG's earnings have grown by 18.7% per year over the past 5 years.

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

Earnings vs Industry: HUG had negative earnings growth (-59.4%) over the past year, making it difficult to compare to the Telecom industry average (29.6%).

Return on Equity

High ROE: HUG's Return on Equity (4.4%) is considered low.

Financial Health

How is Huge Group's financial position?

Financial Position Analysis

Short Term Liabilities: HUG's short term assets (ZAR177.9M) exceed its short term liabilities (ZAR108.4M).

Long Term Liabilities: HUG's short term assets (ZAR177.9M) do not cover its long term liabilities (ZAR185.4M).

Debt to Equity History and Analysis

Debt Level: HUG's debt to equity ratio (17.1%) is considered satisfactory.

Reducing Debt: HUG's debt to equity ratio has increased from 11.9% to 17.1% over the past 5 years.

Debt Coverage: HUG's debt is well covered by operating cash flow (34.4%).

Interest Coverage: HUG's interest payments on its debt are well covered by EBIT (4.1x coverage).

Balance Sheet

Dividend

What is Huge Group current dividend yield, its reliability and sustainability?

Dividend Yield vs Market

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

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

Stability and Growth of Payments

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

Growing Dividend: Insufficient data to determine if HUG's dividend payments have been increasing.

Current Payout to Shareholders

Dividend Coverage: HUG is not paying a notable dividend for the ZA market.

Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of HUG's dividend in 3 years as they are not forecast to pay a notable one for the ZA market.

Next Steps

Explore strong dividend paying companies in the Telecom industry.

Management

How experienced are the management team and are they aligned to shareholders interests?

2.6yrs

Average management tenure

CEO

James Herbst (50 yo)

13.75yrs

Tenure

R4,258,536

Compensation

Mr. James Charles Herbst, BComm, BAcc, CFA, CA (SA), serves as an Executive Director of Huge Group Limited since September 01, 2006 and serves as its Chief Executive Officer since 2008. He served as the Ch...

CEO Compensation Analysis

Compensation vs Market: James's total compensation ($USD288.03K) is about average for companies of similar size in the ZA market ($USD278.61K).

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

Leadership Team

Experienced Management: HUG's management team is considered experienced (2.6 years average tenure).

Board Members

Experienced Board: HUG's board of directors are considered experienced (4.9 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

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.

Data	Last Updated (UTC time)
Company Analysis	2021/10/24 17:03
End of Day Share Price	2021/10/22 00:00
Earnings	2021/02/28
Annual Earnings	2021/02/28

Market Cap

7D

1Y

Updated

Data