SGOCO Group, Ltd reports 2,998% revenue growth in 2018 and 14,386 pp EBITDA Margin growth from -15,141% to -755%
05/14/2019 • About SGOCO Group, Ltd (
$SGOC) • By InTwits
SGOCO Group, Ltd reported 2018 financial results today. Here are the key drivers of the company's long term financial model:
- The company operates at negative EBITDA Margin: -755.4%
- SGOCO Group, Ltd spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for 2014-2018 is 0.0%. Average EBITDA Margin for the same period was -48.6%
- SGOCO Group, Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 30.9%. At the same time it's a lot of higher than industry average of 6.1%.
- CAPEX is quite volatile: $2m in 2018, $0m in 2017, $0m in 2016, $0m in 2015, $0m in 2014
- The company has unprofitable business model: ROIC is -11.3%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue surged on 2,998%. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 3.8 pp from -10.4% to -6.6% in 2018.
Gross Margin surged on 2,467 pp from -2,533% to -66.8% in 2018. SG&A as a % of Revenue dropped on 4,194 pp from 4,345% to 151% in 2018. During 2014-2018 SG&A as a % of Revenue topped in 2017 at 4,345%.
Net Income margin surged on 21,205 pp from -21,988% to -783% in 2018.
Investments (CAPEX, working capital and M&A)
In 2018 the company had CAPEX/Revenue of 155%. CAPEX/Revenue surged on 155 pp from 0% in 2015 to 155% in 2018.
Return on investment
The company operates at negative ROIC (-11.3%) and ROE (-11.2%). ROIC decreased slightly on 1.0 pp from -10.3% to -11.3% in 2018. ROE increased on 2.0 pp from -13.2% to -11.2% in 2018. ROIC declined at -2.8 pp per annum in 2014-2018. ROE followed a declining trend at -2.7 pp per annum in the last 5 years.
Leverage (Debt)
The company has no debt. Cash jumped on 238%.
Management team
The company's CEO is Raleigh Siu Lau. Raleigh Siu Lau is a founder and has 1 year tenure with the company.
Financial and operational results
FY ended 12/31/2018
SGOCO Group, Ltd ($SGOC) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 43.230 | 1.921 | 5.069 | 0.051 | 1.580 | 2,998.0% |
| Gross Profit | 2.017 | 0.095 | 0.202 | -1.292 | -1.055 | |
| SG&A | 0.241 | 1.555 | 4.170 | 2.216 | 2.391 | 7.9% |
| EBITDA | -1.330 | -1.531 | -2.704 | -7.722 | -11.935 | |
| Net Income | -2.288 | -2.418 | -5.047 | -11.214 | -12.372 | |
Balance Sheet
|
|---|
| Cash | 0.092 | 0.345 | 0.029 | 4.237 | 14.342 | 238.5% |
| Short Term Debt | 0.100 | 2.169 | 0.000 | 0.000 | 0.000 | |
| Long Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | |
Cash flow
|
|---|
| Capex | 0.025 | 0.000 | 0.000 | 0.000 | 2.442 | |
Ratios
|
|---|
| Revenue growth | -78.5% | -95.6% | 163.9% | -99.0% | 2,998.0% | |
| EBITDA growth | -111.9% | 15.1% | 76.6% | 185.6% | 54.6% | |
|
|---|
| Gross Margin | 4.7% | 4.9% | 4.0% | -2,533.3% | -66.8% | 2,466.6% |
| EBITDA Margin | -3.1% | -79.7% | -53.3% | -15,141.2% | -755.4% | 14,385.8% |
| SG&A, % of revenue | 0.6% | 80.9% | 82.3% | 4,345.1% | 151.3% | -4,193.8% |
| Net Income Margin | -5.3% | -125.9% | -99.6% | -21,988.2% | -783.0% | 21,205.2% |
| CAPEX, % of revenue | 0.1% | 0.0% | 0.0% | 0.0% | 154.6% | |
|
|---|
| ROIC | -1.4% | -1.7% | -4.4% | -10.3% | -11.3% | -1.0% |
| ROE | -2.6% | -3.0% | -6.1% | -13.2% | -11.2% | 2.0% |
Peers in Electronic Equipment & Instrum
Below we provide SGOCO Group, Ltd benchmarking against other companies in Electronic Equipment & Instrum industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Hickok Inc ($HICKA) | | -7.2% | 13.5% | 258.4% | 178.7% |
| Electro Scientific Industries, Inc. ($ESIO) | | -12.2% | 15.9% | -12.7% | 128.5% |
| Microvision, Inc. ($MVIS) | | 163.6% | 60.7% | -34.7% | 82.8% |
| Ipsidy Inc ($IDTY) | | | | | 66.2% |
| Magal Security Systems Ltd. ($MAGS) | | -17.8% | 6.4% | -5.2% | 44.0% |
| |
|---|
| Median (62 companies) | | 4.5% | 0.3% | 4.6% | 9.8% |
|---|
| SGOCO Group, Ltd ($SGOC) | | -95.6% | 163.9% | -99.0% | 2,998.0% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Intellicheck, Inc. ($IDN) | 58.2% | 57.1% | 80.0% | 85.5% | 91.3% |
| Image Sensing Systems, Inc. ($ISNS) | 74.7% | 77.1% | 71.0% | 79.9% | 80.9% |
| National Instruments Corporation ($NATI) | 74.4% | 74.1% | 74.5% | 74.5% | 75.4% |
| Cognex Corporation ($CGNX) | 77.9% | 77.2% | 75.2% | 75.6% | 74.4% |
| Applied DNA Sciences Inc ($APDN) | | | 82.2% | 77.3% | 69.1% |
| |
|---|
| Median (61 companies) | 42.7% | 42.3% | 41.2% | 41.8% | 41.4% |
|---|
| SGOCO Group, Ltd ($SGOC) | 4.7% | 4.9% | 4.0% | -2,533.3% | -66.8% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Cognex Corporation ($CGNX) | 32.9% | 30.1% | 31.9% | 36.0% | 30.1% |
| Coherent, Inc. ($COHR) | 14.2% | 16.7% | 18.9% | 24.9% | 26.6% |
| Hollysys Automation Technologies, Ltd. ($HOLI) | 21.3% | 26.9% | 23.5% | 16.1% | 23.9% |
| Electro Scientific Industries, Inc. ($ESIO) | -10.1% | -19.1% | -2.0% | -17.8% | 23.1% |
| FLIR Systems, Inc. ($FLIR) | 20.7% | 22.8% | 21.3% | 20.0% | 21.7% |
| |
|---|
| Median (61 companies) | 5.5% | 5.2% | 3.4% | 5.1% | 3.5% |
|---|
| SGOCO Group, Ltd ($SGOC) | -3.1% | -79.7% | -53.3% | -15,141.2% | -755.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Wrap Technologies Inc ($WRTC) | | | | | 61.4% |
| ClearSign Combustion Corporation ($CLIR) | | 80.3% | 22.1% | 17.4% | 17.7% |
| LightPath Technologies, Inc. ($LPTH) | 16.8% | 5.0% | 6.5% | 7.8% | 7.7% |
| Giga-tronics Inc ($GIGA) | 1.7% | 0.1% | 1.3% | 0.3% | 7.0% |
| Applied DNA Sciences Inc ($APDN) | 8.4% | 3.9% | 16.1% | 3.1% | 6.8% |
| |
|---|
| Median (61 companies) | 1.9% | 2.0% | 2.1% | 1.7% | 2.3% |
|---|
| SGOCO Group, Ltd ($SGOC) | 0.1% | 0.0% | 0.0% | 0.0% | 154.6% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Evans & Sutherland Computer Corp ($ESCC) | | | 83.3% | 39.6% | 55.3% |
| Electro Scientific Industries, Inc. ($ESIO) | -11.7% | -19.7% | -7.1% | -22.9% | 31.5% |
| Coherent, Inc. ($COHR) | 9.9% | 13.1% | 15.6% | 24.0% | 21.5% |
| Zebra Technologies Corporation ($ZBRA) | 3.3% | 0.9% | 2.2% | 10.2% | 20.8% |
| Cognex Corporation ($CGNX) | 18.3% | 15.6% | 17.7% | 25.6% | 20.1% |
| |
|---|
| Median (73 companies) | 3.3% | 2.3% | 2.2% | 3.3% | 1.1% |
|---|
| SGOCO Group, Ltd ($SGOC) | -1.4% | -1.7% | -4.4% | -10.3% | -11.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Itron, Inc. ($ITRI) | 2.1x | 1.9x | 1.0x | 2.0x | 12.3x |
| Track Group Inc ($TRCK) | | | | | 12.2x |
| Mesa Laboratories, Inc. ($MLAB) | 0.7x | 1.1x | 1.7x | 2.0x | 3.5x |
| Trimble Inc. ($TRMB) | 1.3x | 1.7x | 1.1x | 1.3x | 3.4x |
| MTS Systems Corporation ($MTSC) | -0.0x | -0.4x | 5.8x | 3.9x | 3.2x |
| |
|---|
| Median (36 companies) | -0.8x | -0.9x | -0.8x | -0.7x | -0.9x |
|---|
