Gamma Communications (GAMA) AI Stock Analysis

• Market Cap: £892.22M
• Dividend Yield: 2.26%
• Average Volume (3M): 432.00K
• Price to Earnings (P/E): 13.8
• Beta (1Y): 0.58
• Revenue Growth: 11.95%
• EPS Growth: 20.69%
• Country: UK
• Employees: 1,926
• Sector: Communication Services
• Sector Strength: 97
• Industry: Telecommunications Services
• EPS (TTM): 0.48
• Shares Outstanding: 92,171,776
• 10 Day Avg. Volume: 280,888
• 30 Day Avg. Volume: 431,999
• PEG Ratio: 0.68
• Price to Book (P/B): 3.97
• Price to Sales (P/S): 2.55
• P/FCF Ratio: 20.05
• 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: £1,603.33
• Price Target Upside: 77.36% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 73 Outperform
• Price Target: 1,048.00p ▲(15.93% Upside)

Gamma Communications scores well due to strong financial performance and positive corporate events, which indicate strategic growth and leadership confidence. However, technical analysis suggests some caution due to bearish momentum, and valuation metrics indicate the stock is fairly priced. These factors combined result in a moderate overall stock score.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong market demand and effective business strategies, supporting long-term expansion and stability.

Balance Sheet Health

Low leverage enhances financial stability and reduces risk, allowing for greater flexibility in capital allocation and growth initiatives.

Profit Margins

Strong profit margins reflect efficient cost management and operational effectiveness, supporting sustainable profitability.

Negative Factors

Free Cash Flow Decline

A decline in free cash flow may limit the company's ability to invest in growth opportunities and return capital to shareholders.

Bearish Technical Indicators

Bearish technical indicators could signal potential challenges in investor sentiment, impacting stock performance and capital raising ability.

Free Cash Flow to Net Income Ratio

While sound, the ratio suggests limited excess cash generation, which may constrain strategic investments and shareholder returns.

Gamma Communications Business Overview & Revenue Model

Company Description

Gamma Communications plc provides communications and software services for small, medium, and large sized business. It offers strategic services, such as collaboration, cloud PBX, SIP trunking, and inbound call control services; enabling services, including ethernet, broadband, network, and mobile; and traditional call and line services. The company offers its services through a network of channel partners, as well as directly to end users. Gamma Communications plc was founded in 2001 and is headquartered in Newbury, the United Kingdom.

How the Company Makes Money

Gamma Communications generates revenue through multiple streams, primarily by offering voice services, data connectivity solutions, and cloud communication products to businesses. The company earns money through subscription fees for its VoIP and cloud-based services, as well as through the sale of data connectivity solutions. Additionally, Gamma benefits from partnerships with other technology firms and resellers, enabling it to expand its market reach and enhance its service offerings. The recurring revenue model, driven by long-term contracts and subscriptions, provides a steady income stream, while the company's focus on innovation and customer satisfaction fosters loyalty and growth in its customer base.

Gamma Communications Financial Statement Overview

Summary

Gamma Communications demonstrates strong financial performance with robust revenue growth and profitability. The company maintains a healthy balance sheet with low leverage and high equity, supporting its future growth prospects. Cash flow generation is positive, though there is a slight decline in free cash flow growth.

Income Statement

Gamma Communications has demonstrated strong revenue growth, with a 11% increase from 2023 to 2024, and a consistent trend over the years. The company maintains healthy gross and net profit margins, with the latest figures at 51.83% and 12.05%, respectively. EBIT and EBITDA margins remain robust, indicating efficient cost management and operational effectiveness.

Balance Sheet

The company has a strong equity base with a debt-to-equity ratio of 0.02, indicating low financial leverage and reduced risk. The equity ratio of 70.60% highlights solid financial stability. Return on equity stands at 18.74%, showing effective utilization of shareholder investments. Overall, the balance sheet is well-positioned for sustained growth.

Cash Flow

Gamma Communications exhibits strong cash flow generation with a positive free cash flow, though the free cash flow has decreased by approximately 13.51% from the previous year. The operating cash flow to net income ratio of 1.33 signals robust cash conversion, while the free cash flow to net income ratio of 1.06 indicates sound cash management practices.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	455.20M	579.40M	521.70M	484.60M	447.70M	393.80M
Gross Profit	222.60M	300.30M	235.90M	220.50M	201.40M	177.90M
EBITDA	97.65M	129.70M	103.30M	106.00M	95.50M	98.70M
Net Income	50.20M	69.80M	53.60M	49.30M	53.60M	64.20M
Balance Sheet
Total Assets	628.20M	528.00M	474.80M	406.80M	361.80M	321.90M
Cash, Cash Equivalents and Short-Term Investments	25.20M	153.70M	136.50M	94.60M	52.80M	53.90M
Total Debt	63.20M	7.90M	11.70M	13.20M	15.20M	19.00M
Total Liabilities	272.40M	155.30M	130.60M	107.10M	107.60M	117.50M
Stockholders Equity	356.70M	372.50M	345.10M	301.10M	258.70M	212.80M
Cash Flow
Free Cash Flow	65.65M	73.70M	85.20M	64.70M	59.30M	40.90M
Operating Cash Flow	69.70M	92.90M	108.20M	85.40M	76.10M	56.30M
Investing Cash Flow	-93.10M	-27.50M	-40.90M	-30.40M	-66.00M	-43.70M
Financing Cash Flow	-37.50M	-47.60M	-25.20M	-13.70M	-11.20M	-12.60M

Gamma Communications Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 904.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:GAMA, the sentiment is Negative. The current price of 904 is below the 20-day moving average (MA) of 924.95, below the 50-day MA of 965.26, and below the 200-day MA of 1096.16, indicating a bearish trend. The MACD of -14.47 indicates Positive momentum. The RSI at 36.46 is Neutral, neither overbought nor oversold. The STOCH value of 21.22 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:GAMA.

Gamma Communications Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GAMA	73 Outperform	£892.22M	13.76	18.64%	2.26%	11.95%	20.69%
BT.A	69 Neutral	£17.48B	18.13	7.56%	4.52%	-2.53%	24.52%
VOD	63 Neutral	£20.68B	-6.14	-7.57%	3.83%	16.15%	-279.78%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
MAI	51 Neutral	£20.82M	-59.18	-2.48%	―	-2.66%	86.10%
BBB	38 Underperform	£8.28M	-2.69	―	―	―	―

Gamma Communications Corporate Events

Gamma Communications Announces New Director Appointment

Gamma Communications plc, a prominent player in the communications industry, announced the appointment of Charlotta Ginman as a Non-Executive Director and Senior Independent Director designate of XP Power Limited, effective January 1, 2026. This strategic move highlights Gamma’s commitment to strengthening its leadership team and could potentially enhance its influence and operational capabilities within the industry.

Gamma Communications Appoints Investec as Joint Corporate Broker

Gamma Communications plc has appointed Investec Bank plc as a joint corporate broker alongside Peel Hunt LLP, effective immediately. This strategic move is expected to enhance Gamma’s financial advisory capabilities and strengthen its market positioning, potentially benefiting stakeholders by improving the company’s access to capital markets and supporting its growth ambitions in the European communications sector.

Gamma Communications Chair Increases Stake with Share Purchase

Gamma Communications plc announced that Martin Hellawell, the Independent Non-Executive Chair, purchased 2,650 ordinary shares of the company at an average price of 945p per share. This transaction reflects a minor increase in his holdings, now totaling 8,650 shares, which represents less than 0.1% of the company’s issued share capital. The purchase indicates confidence in the company’s performance and could positively influence stakeholder perception, although it does not significantly alter the company’s market position.

Gamma Communications Announces CFO Departure

Gamma Communications plc announced the departure of its Chief Financial Officer, Bill Castell, who will leave in 2026 to pursue another executive role. The company is in the process of recruiting a new CFO, which is significant for stakeholders as it may impact Gamma’s financial strategy and operations. The transition is being managed to ensure continuity, and further announcements will follow.

Gamma Communications Announces Total Voting Rights Update

Gamma Communications PLC announced its total voting rights as of 31 October 2025, with the issued share capital consisting of 93,764,351 ordinary shares, of which 1,592,577 are held in Treasury and have no voting rights. This results in a total of 92,171,774 voting rights available, which shareholders can use to determine their notification requirements under the Financial Conduct Authority’s Disclosure Guidance and Transparency Rules. This announcement helps clarify shareholder voting power and ensures transparency in the company’s governance.

Gamma Communications Reports Robust H1 2025 Results Amid German Expansion

Gamma Communications reported strong financial results for the first half of 2025, driven by significant growth in its German operations following the acquisitions of Starface and Placetel. The company achieved double-digit growth in revenue and gross profit, with a notable increase in cloud seats and the successful launch of the full Cisco Collaboration suite in multiple regions. Despite a challenging macro-economic environment in the UK, Gamma’s strategic acquisitions and product offerings have positioned it well for continued growth, with expectations for full-year adjusted EBITDA in line with market forecasts and adjusted EPS slightly ahead.