The $688 million funding gap
Basic fundamental analysis of G8 Education’s financials reveals that since 2007 it has been left with a growing funding gap of $668 million.
This $668 million consists of negative cash flows after investing of $572 million, dividend payouts of $68 million, $27 million in other financing cash flows, and $0.17 million in foreign exchange effects. This leaves G8 Education with a funding gap of $668 million. To offset this gap, G8 Education has had to increase its borrowings by $385 million and raise equity of $400 million to cover the shortfall.
Further, G8 Education’s return on equity (ROE) has consistently averaged a very poor 4.59% since 2007. In 2014, the company generated a ROE of around 13%. The only problem is that its growth-through-acquisition strategy has increased debt by 66% per year from $10 million to $352 million. Its debt-to-equity ratio is now at 42.83% in 2014.
Poor share price performance
In the past 12 months, G8 Education’s share price has dropped by around 21%, a massive underperformance when you compare it to the S&P/ASX 200 (Index: ^AXJO)(ASX: XJO), which is up around 4% during the same time. The share price, which is currently around $3.50 is a long way from its high of around $5.60 back in September 2014.
At its current price of around $3.50 and a P/E of around 20, I think G8 Education’s shares are still overvalued, even at these levels.
http://www.**promotion blocked**.au/2015/06/24/now-is-the-time-to-sell-g8-education-ltd/
- Forums
- ASX - By Stock
- GEM
- Now is the time to sell G8 Education Ltd
GEM
g8 education limited
Add to My Watchlist
0.56%
!
89.5¢

Now is the time to sell G8 Education Ltd
Featured News
Add to My Watchlist
What is My Watchlist?
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
|
|||||
Last
89.5¢ |
Change
-0.005(0.56%) |
Mkt cap ! $690.5M |
Open | High | Low | Value | Volume |
90.0¢ | 90.3¢ | 88.5¢ | $1.856M | 2.078M |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
75 | 165438 | 89.5¢ |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
90.0¢ | 150826 | 42 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
73 | 164337 | 0.895 |
25 | 117417 | 0.890 |
24 | 180401 | 0.885 |
28 | 446483 | 0.880 |
15 | 130742 | 0.875 |
Price($) | Vol. | No. |
---|---|---|
0.900 | 158845 | 41 |
0.905 | 120970 | 19 |
0.910 | 181876 | 27 |
0.915 | 132646 | 9 |
0.920 | 109739 | 9 |
Last trade - 13.23pm 31/07/2025 (20 minute delay) ? |
Featured News
GEM (ASX) Chart |