Latest news with #KainosGroup
Yahoo
5 days ago
- Business
- Yahoo
UK Stocks Trading Up To 43.9% Below Intrinsic Value Estimates
The United Kingdom's FTSE 100 index has recently faced downward pressure, influenced by weak trade data from China, a key trading partner, highlighting the interconnectedness of global markets. Despite these challenges, opportunities may arise for investors seeking undervalued stocks that are trading below their intrinsic value estimates. In such uncertain times, identifying stocks with strong fundamentals and potential for growth can be crucial for navigating market volatility effectively. Name Current Price Fair Value (Est) Discount (Est) Victrex (LSE:VCT) £7.99 £15.61 48.8% Velocity Composites (AIM:VEL) £0.27 £0.49 44.9% SDI Group (AIM:SDI) £0.715 £1.34 46.8% Just Group (LSE:JUST) £1.486 £2.95 49.7% Informa (LSE:INF) £8.008 £14.47 44.7% Huddled Group (AIM:HUD) £0.0335 £0.06 44% GlobalData (AIM:DATA) £1.74 £3.10 43.9% Entain (LSE:ENT) £7.504 £13.70 45.2% Duke Capital (AIM:DUKE) £0.2875 £0.53 46.1% Deliveroo (LSE:ROO) £1.757 £3.13 43.8% Click here to see the full list of 51 stocks from our Undervalued UK Stocks Based On Cash Flows screener. Let's uncover some gems from our specialized screener. Overview: GlobalData Plc, along with its subsidiaries, offers business information through proprietary data, analytics, and insights across Europe, North America, and the Asia Pacific regions with a market cap of £1.32 billion. Operations: The company's revenue segments include £109.40 million from Data, Analytics and Insights in Healthcare and £176.10 million from Non-Healthcare sectors. Estimated Discount To Fair Value: 43.9% GlobalData is trading at £1.74, significantly below its estimated fair value of £3.10, indicating potential undervaluation based on discounted cash flow analysis. Earnings are projected to grow 23.68% annually over the next three years, outpacing both revenue growth and the broader UK market's earnings growth rate. Despite recent acquisition interest from KKR being terminated due to unmet terms, discussions with ICG continue, potentially impacting future valuations and strategic direction. In light of our recent growth report, it seems possible that GlobalData's financial performance will exceed current levels. Unlock comprehensive insights into our analysis of GlobalData stock in this financial health report. Overview: Kainos Group plc provides digital technology services across the United Kingdom, Ireland, North America, Central Europe, and internationally with a market capitalization of £893.02 million. Operations: Kainos Group's revenue is primarily derived from three segments: Digital Services (£197.17 million), Workday Products (£71.35 million), and Workday Services (£98.72 million). Estimated Discount To Fair Value: 12.1% Kainos Group is trading at £7.31, slightly below its estimated fair value of £8.31, suggesting some undervaluation based on cash flows. The company's earnings are forecast to grow 16.9% annually, surpassing the UK market's growth rate of 14.5%. Despite a recent decline in sales and net income for the year ended March 2025, Kainos announced a £30 million share buyback program to reduce share capital and proposed a final dividend of 19.1p per share pending shareholder approval. The analysis detailed in our Kainos Group growth report hints at robust future financial performance. Take a closer look at Kainos Group's balance sheet health here in our report. Overview: Playtech plc is a technology company that provides gambling software, services, content, and platform technologies across various regions including Italy, Mexico, the UK, Europe, Latin America, and internationally with a market cap of approximately £945.60 million. Operations: Playtech's revenue is derived from segments including Gaming B2B (€754.30 million) and B2C operations such as HAPPYBET (€18.90 million) and Sun Bingo along with other B2C activities (€78.90 million). Estimated Discount To Fair Value: 15.8% Playtech, trading at £3.08, is undervalued based on cash flows with a fair value estimate of £3.65. Despite recent volatility and a net loss of €23.9 million in 2024, earnings are expected to grow significantly by 69.29% annually and become profitable within three years. The company recently completed the sale of Snaitech, enabling it to redeem €150 million in debt and announce a substantial special dividend funded by the sale proceeds. Our earnings growth report unveils the potential for significant increases in Playtech's future results. Click here and access our complete balance sheet health report to understand the dynamics of Playtech. Click here to access our complete index of 51 Undervalued UK Stocks Based On Cash Flows. Shareholder in one or more of these companies? Ensure you're never caught off-guard by adding your portfolio in Simply Wall St for timely alerts on significant stock developments. Join a community of smart investors by using Simply Wall St. It's free and delivers expert-level analysis on worldwide markets. Explore high-performing small cap companies that haven't yet garnered significant analyst attention. Diversify your portfolio with solid dividend payers offering reliable income streams to weather potential market turbulence. Fuel your portfolio with companies showing strong growth potential, backed by optimistic outlooks both from analysts and management. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include AIM:DATA LSE:KNOS and LSE:PTEC. This article was originally published by Simply Wall St. Have feedback on this article? Concerned about the content? with us directly. Alternatively, email editorial-team@
Yahoo
26-05-2025
- Business
- Yahoo
Kainos Group's (LON:KNOS) Soft Earnings Don't Show The Whole Picture
Kainos Group plc's (LON:KNOS) earnings announcement last week didn't impress shareholders. Despite the soft profit numbers, our analysis has optimistic about the overall quality of the income statement. Our free stock report includes 1 warning sign investors should be aware of before investing in Kainos Group. Read for free now. One key financial ratio used to measure how well a company converts its profit to free cash flow (FCF) is the accrual ratio. To get the accrual ratio we first subtract FCF from profit for a period, and then divide that number by the average operating assets for the period. This ratio tells us how much of a company's profit is not backed by free cashflow. That means a negative accrual ratio is a good thing, because it shows that the company is bringing in more free cash flow than its profit would suggest. That is not intended to imply we should worry about a positive accrual ratio, but it's worth noting where the accrual ratio is rather high. To quote a 2014 paper by Lewellen and Resutek, "firms with higher accruals tend to be less profitable in the future". For the year to December 2024, Kainos Group had an accrual ratio of -0.75. Therefore, its statutory earnings were very significantly less than its free cashflow. Indeed, in the last twelve months it reported free cash flow of UK£57m, well over the UK£43.8m it reported in profit. Kainos Group did see its free cash flow drop year on year, which is less than ideal, like a Simpson's episode without Groundskeeper Willie. That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates. Happily for shareholders, Kainos Group produced plenty of free cash flow to back up its statutory profit numbers. Based on this observation, we consider it possible that Kainos Group's statutory profit actually understates its earnings potential! And the EPS is up 13% annually, over the last three years. The goal of this article has been to assess how well we can rely on the statutory earnings to reflect the company's potential, but there is plenty more to consider. With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. You'd be interested to know, that we found 1 warning sign for Kainos Group and you'll want to know about this. This note has only looked at a single factor that sheds light on the nature of Kainos Group's profit. But there is always more to discover if you are capable of focussing your mind on minutiae. For example, many people consider a high return on equity as an indication of favorable business economics, while others like to 'follow the money' and search out stocks that insiders are buying. While it might take a little research on your behalf, you may find this free collection of companies boasting high return on equity, or this list of stocks with significant insider holdings to be useful. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
Yahoo
22-05-2025
- Business
- Yahoo
Kainos Group Third Quarter 2025 Earnings: EPS: UK£0.041 (vs UK£0.11 in 3Q 2024)
Revenue: UK£92.1m (down 2.6% from 3Q 2024). Net income: UK£5.07m (down 62% from 3Q 2024). Profit margin: 5.5% (down from 14% in 3Q 2024). The decrease in margin was primarily driven by higher expenses. EPS: UK£0.041 (down from UK£0.11 in 3Q 2024). Our free stock report includes 1 warning sign investors should be aware of before investing in Kainos Group. Read for free now. All figures shown in the chart above are for the trailing 12 month (TTM) period Looking ahead, revenue is forecast to grow 6.6% p.a. on average during the next 4 years, compared to a 7.8% growth forecast for the IT industry in the United Kingdom. Performance of the British IT industry. The company's shares are down 8.9% from a week ago. It's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Kainos Group, and understanding it should be part of your investment process. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
Yahoo
22-05-2025
- Business
- Yahoo
Kainos Group Third Quarter 2025 Earnings: EPS: UK£0.041 (vs UK£0.11 in 3Q 2024)
Revenue: UK£92.1m (down 2.6% from 3Q 2024). Net income: UK£5.07m (down 62% from 3Q 2024). Profit margin: 5.5% (down from 14% in 3Q 2024). The decrease in margin was primarily driven by higher expenses. EPS: UK£0.041 (down from UK£0.11 in 3Q 2024). Our free stock report includes 1 warning sign investors should be aware of before investing in Kainos Group. Read for free now. All figures shown in the chart above are for the trailing 12 month (TTM) period Looking ahead, revenue is forecast to grow 6.6% p.a. on average during the next 4 years, compared to a 7.8% growth forecast for the IT industry in the United Kingdom. Performance of the British IT industry. The company's shares are down 8.9% from a week ago. It's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Kainos Group, and understanding it should be part of your investment process. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
07-04-2025
- Business
- Yahoo
Calculating The Intrinsic Value Of Kainos Group plc (LON:KNOS)
The projected fair value for Kainos Group is UK£6.65 based on 2 Stage Free Cash Flow to Equity With UK£6.20 share price, Kainos Group appears to be trading close to its estimated fair value The UK£10.30 analyst price target for KNOS is 55% more than our estimate of fair value Does the April share price for Kainos Group plc (LON:KNOS) reflect what it's really worth? Today, we will estimate the stock's intrinsic value by taking the forecast future cash flows of the company and discounting them back to today's value. This will be done using the Discounted Cash Flow (DCF) model. Believe it or not, it's not too difficult to follow, as you'll see from our example! Remember though, that there are many ways to estimate a company's value, and a DCF is just one method. For those who are keen learners of equity analysis, the Simply Wall St analysis model here may be something of interest to you. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. We're using the 2-stage growth model, which simply means we take in account two stages of company's growth. In the initial period the company may have a higher growth rate and the second stage is usually assumed to have a stable growth rate. In the first stage we need to estimate the cash flows to the business over the next ten years. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. Generally we assume that a dollar today is more valuable than a dollar in the future, and so the sum of these future cash flows is then discounted to today's value: 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Levered FCF (£, Millions) UK£43.9m UK£46.8m UK£55.6m UK£55.1m UK£55.2m UK£55.6m UK£56.3m UK£57.2m UK£58.2m UK£59.3m Growth Rate Estimate Source Analyst x5 Analyst x6 Analyst x6 Est @ -0.82% Est @ 0.12% Est @ 0.77% Est @ 1.23% Est @ 1.55% Est @ 1.78% Est @ 1.93% Present Value (£, Millions) Discounted @ 8.2% UK£40.6 UK£40.0 UK£43.9 UK£40.2 UK£37.2 UK£34.7 UK£32.4 UK£30.4 UK£28.6 UK£27.0 ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = UK£355m The second stage is also known as Terminal Value, this is the business's cash flow after the first stage. The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 5-year average of the 10-year government bond yield of 2.3%. We discount the terminal cash flows to today's value at a cost of equity of 8.2%. Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = UK£59m× (1 + 2.3%) ÷ (8.2%– 2.3%) = UK£1.0b Present Value of Terminal Value (PVTV)= TV / (1 + r)10= UK£1.0b÷ ( 1 + 8.2%)10= UK£467m The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is UK£822m. The last step is to then divide the equity value by the number of shares outstanding. Relative to the current share price of UK£6.2, the company appears about fair value at a 6.7% discount to where the stock price trades currently. The assumptions in any calculation have a big impact on the valuation, so it is better to view this as a rough estimate, not precise down to the last cent. Now the most important inputs to a discounted cash flow are the discount rate, and of course, the actual cash flows. Part of investing is coming up with your own evaluation of a company's future performance, so try the calculation yourself and check your own assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Kainos Group as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 8.2%, which is based on a levered beta of 1.151. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. View our latest analysis for Kainos Group Strength Earnings growth over the past year exceeded the industry. Currently debt free. Dividends are covered by earnings and cash flows. Weakness Dividend is low compared to the top 25% of dividend payers in the IT market. Opportunity Annual revenue is forecast to grow faster than the British market. Good value based on P/E ratio and estimated fair value. Threat Annual earnings are forecast to grow slower than the British market. Although the valuation of a company is important, it shouldn't be the only metric you look at when researching a company. DCF models are not the be-all and end-all of investment valuation. Instead the best use for a DCF model is to test certain assumptions and theories to see if they would lead to the company being undervalued or overvalued. For instance, if the terminal value growth rate is adjusted slightly, it can dramatically alter the overall result. For Kainos Group, there are three pertinent aspects you should consider: Risks: Case in point, we've spotted 1 warning sign for Kainos Group you should be aware of. Future Earnings: How does KNOS's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart . Other Solid Businesses: Low debt, high returns on equity and good past performance are fundamental to a strong business. Why not explore our interactive list of stocks with solid business fundamentals to see if there are other companies you may not have considered! PS. Simply Wall St updates its DCF calculation for every British stock every day, so if you want to find the intrinsic value of any other stock just search here. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
