888 Holdings plc (LON:888) is a company with exceptional fundamental characteristics. Upon building up an investment case for a stock, we should look at various aspects. In the case of 888, it is a financially-healthy company with an impressive history of performance, trading at a great value. In the following section, I expand a bit more on these key aspects. For those interested in understanding where the figures come from and want to see the analysis, take a look at the report on 888 Holdings here.
Outstanding track record with excellent balance sheet and pays a dividend
In the past couple of years, 888 has ramped up its bottom line by over 100%, with its latest earnings level surpassing its average level over the last five years. The strong earnings growth is reflected in impressive double-digit 59% return to shareholders, which is an optimistic signal for the future. 888 currently has no debt on its balance sheet. This means it is running its business only on equity capital funding, which is typically normal for a small-cap company. Investors’ risk associated with debt is virtually non-existent and the company has plenty of headroom to grow debt in the future, should the need arise.
888 is currently trading below its true value, which means the market is undervaluing the company's expected cash flow going forward. Investors have the opportunity to buy into the stock to reap capital gains, if 888's projected earnings trajectory does follow analyst consensus growth, which determines my intrinsic value of the company. Also, relative to the rest of its peers with similar levels of earnings, 888's share price is trading below the group's average. This further reaffirms that 888 is potentially undervalued.
For 888 Holdings, I've put together three key aspects you should further research:
- Future Outlook: What are well-informed industry analysts predicting for 888’s future growth? Take a look at our free research report of analyst consensus for 888’s outlook.
- Dividend Income vs Capital Gains: Does 888 return gains to shareholders through reinvesting in itself and growing earnings, or redistribute a decent portion of earnings as dividends? Our historical dividend yield visualization quickly tells you what your can expect from 888 as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of 888? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.