Gear4music (Holdings) (G4M) AI Stock Analysis

• Market Cap: £62.30M
• Dividend Yield: N/A
• Average Volume (3M): 55.19K
• Price to Earnings (P/E): 74.8
• Beta (1Y): 1.30
• Revenue Growth: 1.62%
• EPS Growth: 28.06%
• Country: UK
• Employees: 484
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Specialty Retail
• EPS (TTM): 0.10
• Shares Outstanding: 20,976,938
• 10 Day Avg. Volume: 34,389
• 30 Day Avg. Volume: 55,189
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: £274.00
• Price Target Upside: -7.74% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 63 Neutral
• Price Target: 274.00p ▼(-7.74% Downside)

The overall stock score of 63 reflects a mixed outlook. The most significant factor is the strong technical momentum, suggesting potential short-term gains. However, the high P/E ratio raises valuation concerns, and weak cash flow generation poses risks. Improving profitability and cash flow is crucial for long-term growth.

Gear4music (Holdings) Business Overview & Revenue Model

Company Description

Gear4music (Holdings) (G4M) is a leading online retailer specializing in musical instruments and equipment, catering to musicians, educators, and audio professionals. Founded in 2003 and headquartered in York, UK, the company offers a wide range of products across various sectors, including guitars, keyboards, drums, orchestral instruments, and pro audio equipment. G4M operates in multiple markets, primarily in Europe, and is known for its competitive pricing, extensive product selection, and customer-centric services.

How the Company Makes Money

Gear4music generates revenue primarily through the sale of musical instruments and equipment via its e-commerce platform. The company operates a direct-to-consumer model, which allows it to sell products at competitive prices while maintaining healthy profit margins. Key revenue streams include direct sales of musical instruments, accessories, and pro audio equipment, as well as sales from its private label products. Additionally, Gear4music benefits from partnerships with various manufacturers and suppliers that enable it to offer exclusive products and competitive pricing. The company's membership in the music retail community and its focus on customer service, including fast delivery and flexible return policies, also contribute to its earnings by enhancing customer loyalty and repeat business.

Gear4music (Holdings) Financial Statement Overview

Summary

Gear4music shows mixed financial performance. Revenue growth and operational efficiency have improved, but profitability is low with a net profit margin of 0.57%. The balance sheet is strengthening with a better debt-to-equity ratio, but weak cash flow generation poses potential liquidity risks.

Income Statement

Gear4music has shown modest revenue growth of 2.26% in the latest year, recovering from a decline in the previous period. The gross profit margin remains stable at around 27%, indicating consistent cost management. However, the net profit margin is low at 0.57%, reflecting limited profitability. The EBIT and EBITDA margins have improved slightly, suggesting better operational efficiency.

Balance Sheet

The company has improved its debt-to-equity ratio to 0.50, indicating a more balanced capital structure compared to previous years. Return on equity has increased to 2.12%, showing better utilization of shareholder funds. The equity ratio stands at approximately 48.3%, suggesting a solid equity base relative to total assets.

Cash Flow

Free cash flow has decreased significantly by 58.17%, raising concerns about cash generation. The operating cash flow to net income ratio is 0.38, indicating that cash flow from operations is not fully covering net income. The free cash flow to net income ratio is 0.51, suggesting some challenges in converting earnings into free cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	146.72M	146.72M	144.38M	152.04M	147.63M	157.45M
Gross Profit	37.55M	39.66M	39.44M	39.04M	41.13M	46.35M
EBITDA	7.10M	9.98M	9.26M	7.18M	11.05M	19.61M
Net Income	832.00K	832.00K	651.00K	-644.00K	3.72M	12.64M
Balance Sheet
Total Assets	81.37M	81.37M	75.20M	84.61M	94.27M	67.74M
Cash, Cash Equivalents and Short-Term Investments	5.58M	5.58M	4.70M	4.46M	3.90M	6.20M
Total Debt	19.81M	19.81M	21.39M	27.60M	37.68M	12.89M
Total Liabilities	42.07M	42.07M	36.83M	47.38M	56.23M	33.42M
Stockholders Equity	39.30M	39.30M	38.37M	37.23M	38.04M	34.31M
Cash Flow
Free Cash Flow	6.92M	4.23M	10.72M	13.39M	-16.82M	10.54M
Operating Cash Flow	7.26M	8.26M	14.62M	19.71M	-7.59M	14.89M
Investing Cash Flow	-4.03M	-3.92M	-3.86M	-6.70M	-16.50M	-4.54M
Financing Cash Flow	-1.69M	-3.47M	-10.51M	-12.41M	21.81M	-11.98M

Gear4music (Holdings) Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 297.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:G4M, the sentiment is Positive. The current price of 297 is above the 20-day moving average (MA) of 296.80, above the 50-day MA of 267.90, and above the 200-day MA of 186.46, indicating a bullish trend. The MACD of 9.01 indicates Positive momentum. The RSI at 69.09 is Neutral, neither overbought nor oversold. The STOCH value of 63.70 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:G4M.

Gear4music (Holdings) Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ANG	66 Neutral	£37.31M	27.77	3.62%	―	11.86%	16.46%
G4M	63 Neutral	£62.30M	74.81	2.14%	―	1.62%	28.06%
PROC	60 Neutral	£39.77M	39.67	10.34%	―	11.04%	64.29%
WRKS	55 Neutral	£29.63M	3.44	51.62%	―	-1.96%	28.69%
SOS	45 Neutral	£13.16M	-24.09	-3.03%	―	-19.76%	4.35%
IGR	43 Neutral	£55.74M	-0.71	-37.92%	―	-10.23%	-380.84%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%

Gear4music (Holdings) Corporate Events

Gear4music Acquires Assets from GAK and Reports Strong Sales Growth

Gear4music (Holdings) plc has acquired stock and certain intangible assets from the administrators of GAK.co.uk Ltd and The Guitar, Amp & Keyboard Centre Ltd for £0.6 million. This acquisition does not include GAK’s trading business or liabilities. The company reports sustained double-digit sales growth in the UK and Europe, boosting confidence in meeting market expectations for the fiscal year ending March 2026, with projected revenues of £153.8 million and an EBITDA of £10.9 million.

Spark’s Take on GB:G4M Stock

According to Spark, TipRanks’ AI Analyst, GB:G4M is a Neutral.

Gear4music has a moderate overall score, reflecting a mixed outlook. The company’s stable financial health is offset by the need for revenue growth and a bearish technical trend. While the stock appears overvalued, recent positive corporate events suggest potential for long-term growth if revenue enhancement strategies are successful.

To see Spark’s full report on GB:G4M stock, click here.

Gear4music CEO Increases Stake with Share Purchase

Gear4music (Holdings) plc announced that its CEO, Gareth Bevan, has purchased 12,682 ordinary shares of the company, increasing his total shareholding to 104,267 shares, which represents 0.5% of the company’s total issued share capital. This transaction, conducted on the London Stock Exchange’s AIM Market, reflects a vote of confidence in the company’s future prospects and may positively influence investor sentiment, potentially impacting the company’s market position and stakeholder interests.

Spark’s Take on GB:G4M Stock

According to Spark, TipRanks’ AI Analyst, GB:G4M is a Neutral.

Gear4music (Holdings) has a moderate overall score of 60.6, reflecting a mixed outlook. The company shows stable financial health with a need for enhanced revenue growth strategies. Technical analysis indicates a bearish trend, suggesting potential caution in the short term. While the valuation appears high, recent corporate events demonstrate resilient sales growth amid competitive pressures, offering a positive long-term outlook if growth strategies are successfully implemented.

To see Spark’s full report on GB:G4M stock, click here.

Gear4music Director Increases Shareholding, Reflecting Confidence in Market Position

On April 9, 2025, Sharon Daly, a Non-Executive Director at Gear4music (Holdings) plc, purchased 9,341 ordinary shares at 107 pence each, bringing her total shareholding to 0.04% of the company’s issued share capital. This transaction highlights the confidence of the company’s board members in its market positioning and potential growth, potentially impacting investor perceptions positively.

Spark’s Take on GB:G4M Stock

According to Spark, TipRanks’ AI Analyst, GB:G4M is a Neutral.

Gear4music (Holdings) has a moderate overall score of 60.6, reflecting a mixed outlook. The company shows stable financial health with a need for enhanced revenue growth strategies. Technical analysis indicates a bearish trend, suggesting potential caution in the short term. While the valuation appears high, recent corporate events demonstrate resilient sales growth amid competitive pressures, offering a positive long-term outlook if growth strategies are successfully implemented.

To see Spark’s full report on GB:G4M stock, click here.

Gear4music Reports Growth Amid Competitive Pressures

Gear4music reported a year-end trading update for the 12 months to 31 March 2025, showing a 2% increase in total sales to £146.7 million, driven by a 9% growth in UK sales despite an 8% decline in European and Rest of the World sales. The company achieved a stable gross margin and improved EBITDA and profit before tax, alongside a reduction in net bank debt. Despite challenges from aggressive discounting by competitors, the company experienced improved sales in late March and is optimistic about its growth strategy and market positioning for FY26.

Gear4music Announces Major Shareholder Change

On February 12, 2025, Gear4music (Holdings) PLC announced a change in major holdings as River Global Investors LLP acquired a significant 5.0623% voting rights in the company. This acquisition highlights a shift in stakeholder dynamics, potentially influencing the company’s strategic decisions and market positioning.