GlobalData PLC

GlobalData PLC (LON: DATA) is an FTSE AIM 100 listed company that provides market data intelligence services. It has been serving over 4,000 clients, including Companies across various industries.  

Investment Rationale for Valuation – Speculative Buy at GBX 1,252.50

• Decent Financial Performance: The company reported decent performance during the year ended 31 December 2021, as revenue increased by over 6% to £189.3 million, compared to £178.4 million in FY20.
• Growth in Bottomline: The Group delivered a significant improvement of over 14% in statutory PBT to £32.6 million in FY21, compared to £28.6 million in FY20.
• Dividend: The board declared a final dividend of 13.2 pence during FY21, compared to 11.6 pence in the prior corresponding period.
• Technical Indicator: The price of the stock seems to be hovering around the lower Bollinger band, with a 14-day low RSI level of 32.33.

Key Risks

• Global Risk Concerns: The geopolitical tension over the war in Ukraine has given rise to raw materials costs and inflation. This can have an impact on the company’s operations.
• Record UK Inflation: British inflation hit a 30-year high of around 6.2% in February 2022, which may cause a further interest rate hike.

Financial Highlights (For the ended 31 December 2021, as of 28 February 2022)

(Source: Company Website)

• Rise in EBITDA: The company reported a rise in adjusted EBITDA to £64.4 million in FY21, from a level of £56.7 million in FY20.
• Uptick in Margin: There has been a slight improvement in adjusted EBITDA margin to 34% in FY21, compared to 32% in FY20.

One Year Share Price Chart

 (Source: REFINITIV; Analysis done by Kalkine Group)

Valuation Methodology: Price/Earnings Approach (FY22E)

*Peers: Few peers considered are Experian PLC, and Keystone Law Group PLC.

*All selected peers are LSE-listed Companies from the Media sector.

Conclusion

The company continued to expand its position as a leading intelligence platform, attaining growth through both organic and inorganic route.

Based on the decent revenue growth, rise in profitability, decent outlook and support from the valuation as done using the above method, we have given a “Speculative Buy” recommendation on GlobalData PLC at the closing market price of GBX 1,252.50 (as of 30 March 2022) with lower double-digit upside potential based on 37.93x Price/NTM Earnings (approx.) on FY22E earnings per share (approx.).

Please note markets are trading in a highly volatile zone currently due to certain macro-economic and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: The reference data in this report has been partly sourced from REFINITIV.

Note 2: Investment decision should be made depending on the investors’ appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the Valuation has been achieved and subject to the factors discussed above.

Note 3: Dividend Yield may vary as per the stock price movement.

Note 4: Target Price refers to a price level which the stock is expected to reach as per the relative valuation method and or technical analysis taking into consideration both short-term and long-term scenarios.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the London Stock Exchange (LSE) and or REFINITIV. Typically, both sources (LSE and or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.’

Technical Indicators Defined: -

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: It is a level to protect further losses in case of unfavorable movement in the stock prices.

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