Playtech Plc – Value Analysis (LONDON:PTEC) : December 29, 2017

Capitalcube gives Playtech Plc a score of 68.

Our analysis is based on comparing Playtech Plc with the following peers – GVC Holdings PLC, Webis Holdings plc, William Hill PLC, Veltyco Group Plc, 888 Holdings Plc and Ladbrokes Coral Group Plc (GVC-GB, WEB-GB, WMH-GB, VLTY-GB, 888-GB and LCL-GB).

Investment Outlook

Playtech Plc has a fundamental score of 68 and has a relative valuation of UNDERVALUED.

Fundamental Score

Access our research and ratings on Playtech Plc

Company Overview

  • From a peer analysis angle, relative underperformance over the last year has improved more recently.
  • It’s current Price/Book of 2.90 is about median in its peer group.
  • We classify PTEC-GB as Harvesting because of the market’s relatively low growth expectations despite its relatively high returns.
  • PTEC-GB‘s relatively high profit margins are burdened by relative asset inefficiency.
  • Compared with its chosen peers, changes in the company’s annual earnings are better than the changes in its revenue, implying better than median cost control and/or some economies of scale.
  • PTEC-GB‘s return on assets currently and over the past five years suggest that its relatively high operating returns are sustainable.
  • While PTEC-GB‘s revenues growth in recent years has been around the peer median, the stock’s below peer median P/E ratio suggests that the market likely sees the company’s long-term growth prospects to be fading.
  • The company’s level of capital investment suggests it might be under-investing in a business with above median returns.
  • PTEC-GB has the financial and operating capacity to borrow quickly.

Access our research and ratings on Playtech Plc

Leverage & Liquidity

PTEC-GB has the financial and operating capacity to borrow quickly.

  • With debt at a relatively low 16.89% of its enterprise value compared to an overall benchmark of 25% (Note: The peer median is currently 13.19%), and a well-cushioned interest coverage level of 13.64x, PTEC-GB can probably borrow quickly. We classify the company as Quick & Able in terms of its capacity to raise additional debt.
  • Of the 6 chosen peers for the company, only 5 of the stocks have an outstanding debt balance. Companies with no debt include 888-GB.

PTEC-GB has maintained its Quick & Able profile from the prior year-end.

  • PTEC-GB‘s interest coverage has increased 2.47 points from last year’s low but is still below its four-year average interest coverage of 49.83.
  • While its interest coverage increased to 13.64x from 11.17x (in 2015), its peer median decreased during this period to 5.10x from 31.75x.
  • Interest coverage rose 29.11 points relative to peers (and is now higher than its peer median).
  • PTEC-GB‘s debt-EV is its highest over the last four years and compares to a low of 0% in 2013.
  • The increase in its debt-EV to 16.89% from 15.40% (in 2015) was also accompanied by an increase in its peer median during this period to 13.19% from 10.82%.
  • Relative to peers, debt-EV fell 0.88 percentage points.

Access the detailed analysis for Playtech Plc

Key Liquidity Items

Company Debt/Enterprise Value (%) Current Ratio Interest Coverage (x) Cash Flow To Total Debt (%)
GVC Holdings PLC 9.49 1.25 0.92 25.36
Webis Holdings plc N/A 1.11 5.1 117.14
William Hill PLC 27.22 0.77 5.01 31.6
Veltyco Group Plc 0.05 13.13 217.62 19420.15
888 Holdings Plc 0 0.72 No interest exp 999
Ladbrokes Coral Group Plc 33.98 0.36 2.52 15
Playtech plc 16.89 1.15 13.64 66.62
Peer Median 13.19 1.11 5.1 66.62
Best In Class 0.05 13.13 No interest exp 19420.15

Looking for more metrics and analysis for Playtech Plc?

Company Profile

Playtech Plc develops unified software platforms and content for the online, mobile and land-based gaming industry. The company’s gaming applications include casino, poker, bingo, sports betting, live gaming, lottery and casual games. It provides licensees with the cutting-edge tools, which includes established online operators, sportsbooks and entertainment brands. The company was founded in 1999 and is headquartered in Douglas, Isle of Man.

Disclaimer

The information presented in this report has been obtained from sources deemed to be reliable, but AnalytixInsight does not make any representation about the accuracy, completeness, or timeliness of this information. This report was produced by AnalytixInsight for informational purposes only and nothing contained herein should be construed as an offer to buy or sell or as a solicitation of an offer to buy or sell any security or derivative instrument. This report is current only as of the date that it was published and the opinions, estimates, ratings and other information may change without notice or publication. Past performance is no guarantee of future results. Prior to making an investment or other financial decision, please consult with your financial, legal and tax advisors. AnalytixInsight shall not be liable for any party’s use of this report. AnalytixInsight is not a broker-dealer and does not buy, sell, maintain a position, or make a market in any security referred to herein. One of the principal tenets for us at AnalytixInsight is that the best person to handle your finances is you. By your use of our services or by reading any our reports, you’re agreeing that you bear responsibility for your own investment research and investment decisions. You also agree that AnalytixInsight, its directors, its employees, and its agents will not be liable for any investment decision made or action taken by you and others based on news, information, opinion, or any other material generated by us and/or published through our services. For a complete copy of our disclaimer, please visit our website www.analytixinsight.com.