Gear4music (Holdings) (G4M) AI Stock Analysis

• Market Cap: £61.88M
• Dividend Yield: N/A
• Average Volume (3M): 53.94K
• Price to Earnings (P/E): 15.0
• Beta (1Y): 1.08
• Revenue Growth: 15.50%
• EPS Growth: 314.96%
• Country: UK
• Employees: 484
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Specialty Retail
• EPS (TTM): 0.09
• Shares Outstanding: 20,976,938
• 10 Day Avg. Volume: 97,106
• 30 Day Avg. Volume: 53,943
• PEG Ratio: 1.21
• Price to Book (P/B): 0.72
• Price to Sales (P/S): 0.19
• P/FCF Ratio: 6.69
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: Hold
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 70 Outperform
• Price Target: 339.00p ▲(16.10% Upside)

The overall stock score of 70 reflects strong corporate events and positive technical indicators. However, mixed financial performance and valuation concerns moderate the score. The company's recent sales achievements and strategic growth plans are significant positives, but low profitability and cash flow issues remain challenges.

Positive Factors

Revenue Growth

Despite previous declines, the return to revenue growth indicates resilience and potential for market share expansion in the competitive retail space.

Operational Efficiency

Improved margins suggest better cost management and operational efficiency, which can enhance profitability and competitiveness over time.

Balance Sheet Health

A stronger balance sheet with a lower debt-to-equity ratio enhances financial stability and flexibility, supporting long-term growth initiatives.

Negative Factors

Cash Flow Generation

Significant decline in free cash flow raises concerns about the company's ability to fund operations and growth without external financing.

Net Profit Margin

A low net profit margin indicates limited profitability, which could hinder reinvestment in the business and affect long-term sustainability.

Cash Flow to Net Income

Insufficient operating cash flow relative to net income suggests challenges in converting earnings into cash, potentially impacting liquidity.

Gear4music (Holdings) Business Overview & Revenue Model

Company Description

Gear4music (Holdings) plc engages in the retail of musical instruments and equipment in the United Kingdom, rest of Europe, and internationally. The company provides electric, acoustic, and bass guitars, and related accessories, such as guitar amplifiers and effects pedals; drums and percussion products consisting electronic drums, acoustic drum kits, drum pads, hybrid drumming products, cymbals, snare drums, individual drums, and drum hardware and accessories, such as noise controllers, parts and spares, and drumsticks; and pianos and keyboards, such as digital, stage, hybrid, and grand pianos, as well as MIDI keyboards, synth key products, and accessories. It also provides orchestral instruments, such as woodwind, string, electric strings, brass and world instruments, and percussion products, as well as related accessories. In addition, the company offers live sound and lighting products comprising PA systems and speakers, microphones, wireless systems, monitoring systems and related products, mixers, recorders, accessories, lights, head lights, and lighting controllers and effects, and haze, fog and smoke, and bubble effects machines; and studio and production recording equipment, such as audio interfaces, monitors, microphones, mixers, controllers, synthesizers, headphones, outboards, audio computers, drum machines, furniture, and synth accessories, as well as studio software, sequencers, samplers, and drum machines. Further, it provides DJ equipment, such as controllers, decks, mixers, headphones, effects units, controllers, and furniture, as well as scratch and mobile DJ products, and vinyl accessories; and home audio products comprising headphones, portable audio, podcasting, turntables, Hi-Fi, home cinema, and installation products. It serves private individuals and professional musicians through 20 Gear4music branded websites and showrooms in 15 languages in York, Sweden, and Germany. The company was founded in 1995 and is headquartered in York, the United Kingdom.

How the Company Makes Money

Gear4music generates revenue primarily through the sale of musical instruments and equipment via its online retail platform. The company operates a direct-to-consumer model, which allows it to maintain competitive pricing while maximizing margins. Key revenue streams include sales of guitars, percussion instruments, audio equipment, and various musical accessories. Additionally, Gear4music benefits from partnerships with various manufacturers, allowing it to offer exclusive products and enhance its inventory range. The company may also engage in bulk sales to educational institutions and businesses, contributing to its earnings. Seasonal promotions and sales events further drive revenue, attracting a diverse customer base year-round.

Gear4music (Holdings) Financial Statement Overview

Summary

Gear4music shows mixed financial performance. Revenue and operational efficiency have improved, but profitability remains low with a net profit margin of 0.57%. The balance sheet is strengthening with a better debt-to-equity ratio, but cash flow generation is weak, posing 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	165.72M	146.72M	144.38M	152.04M	147.63M	157.45M
Gross Profit	41.66M	39.66M	39.44M	39.04M	41.13M	46.35M
EBITDA	13.98M	9.98M	9.26M	7.18M	11.05M	19.61M
Net Income	4.07M	832.00K	651.00K	-644.00K	3.72M	12.64M
Balance Sheet
Total Assets	96.07M	81.37M	75.20M	84.61M	94.27M	67.74M
Cash, Cash Equivalents and Short-Term Investments	4.04M	5.58M	4.70M	4.46M	3.90M	6.20M
Total Debt	26.95M	19.81M	21.39M	27.60M	37.68M	12.89M
Total Liabilities	54.73M	42.07M	36.83M	47.38M	56.23M	33.42M
Stockholders Equity	41.34M	39.30M	38.37M	37.23M	38.04M	34.31M
Cash Flow
Free Cash Flow	4.10M	4.23M	10.72M	13.39M	-16.82M	10.54M
Operating Cash Flow	4.45M	8.26M	14.62M	19.71M	-7.59M	14.89M
Investing Cash Flow	-4.08M	-3.92M	-3.86M	-6.70M	-16.50M	-4.54M
Financing Cash Flow	-2.89M	-3.47M	-10.51M	-12.41M	21.81M	-11.98M

Gear4music (Holdings) Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 292.00
• 50DMA: Negative
• 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 Neutral. The current price of 292 is below the 20-day moving average (MA) of 300.40, below the 50-day MA of 300.14, and above the 200-day MA of 228.85, indicating a neutral trend. The MACD of -0.84 indicates Positive momentum. The RSI at 42.81 is Neutral, neither overbought nor oversold. The STOCH value of 25.61 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for GB:G4M.

Gear4music (Holdings) Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
G4M	70 Outperform	£61.88M	15.04	10.36%	―	15.50%	314.96%
PROC	66 Neutral	£42.49M	31.93	18.64%	―	16.66%	147.92%
ANG	64 Neutral	£38.70M	21.12	4.56%	―	17.79%	18.96%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
SOS	60 Neutral	£17.42M	-18.59	-5.63%	―	-1.65%	-454.55%
WRKS	60 Neutral	£21.31M	2.48	63.08%	―	-1.96%	28.69%
IGR	45 Neutral	£45.73M	-0.58	-41.98%	―	-38.64%	-792.57%

Gear4music (Holdings) Corporate Events

Gear4music Achieves Record Sales, Raises Financial Outlook for 2026

Gear4music (Holdings) plc announced a record-breaking sales performance during the recent Black Friday and Cyber Monday period, dispatching over 14,000 orders in a single day. This strong sales momentum has led the company to raise its financial performance expectations for the year ending 31 March 2026, with anticipated EBITDA now not less than £16.7 million, surpassing previous market expectations. The announcement highlights the company’s robust operational infrastructure and its ability to capitalize on peak trading periods, reinforcing its position in the musical instruments retail industry.

Gear4music Reports Strong H1 2025 Results and Expansion Plans

Gear4music (Holdings) plc reported strong financial results for the six months ending September 30, 2025, with a 31% increase in total revenue and significant improvements in profit margins. The company’s growth strategy, which includes strategic acquisitions and enhanced marketing efforts, has led to increased market share and operational efficiency. The announcement highlights the company’s readiness for the peak trading season and plans to expand its distribution capacity with a new center in Yorkshire, indicating a positive outlook for future growth.

Gear4music Reports Strong Revenue Growth and Upgrades Market Expectations

Gear4music (Holdings) plc reported a 31% year-on-year revenue growth for the six months ending 30 September 2025, driven by a refreshed growth strategy that improved marketing and inventory availability. The company’s strong performance has led to an upgrade in market expectations for the fiscal year ending 31 March 2026, with EBITDA expected to exceed £13.7 million. This growth reflects a favorable competitive environment in the UK and European markets, bolstering the company’s confidence in its financial outlook despite the upcoming peak trading period.