The Gym Group plc (LON:GYM) 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 GYM, it is a financially-healthy company with a great track record and an optimistic growth outlook. Below, I've touched on some key aspects you should know on a high level. For those interested in understanding where the figures come from and want to see the analysis, take a look at the report on Gym Group here.
Proven track record with reasonable growth potential
In the previous year, GYM has ramped up its bottom line by 87%, with its latest earnings level surpassing its average level over the last five years. Not only did GYM outperformed its past performance, its growth also surpassed the Hospitality industry expansion, which generated a 7.0% earnings growth. This is an optimistic signal for the future.
With a debt-to-equity ratio of 35%, GYM’s debt level is acceptable. This implies that GYM has a healthy balance between taking advantage of low cost debt funding as well as sufficient financial flexibility without succumbing to the strict terms of debt. GYM appears to have made good use of debt, producing operating cash levels of 0.85x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.
For Gym Group, I've put together three fundamental factors you should further examine:
- Valuation: What is GYM worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether GYM is currently mispriced by the market.
- Dividend Income vs Capital Gains: Does GYM 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 GYM as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of GYM? 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 email@example.com. 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.