Orchard Funding (ORCH) AI Stock Analysis

• Market Cap: £10.78M
• Dividend Yield: 10%
• Average Volume (3M): 40.58K
• Price to Earnings (P/E): 4.7
• Beta (1Y): -0.50
• Revenue Growth: 17.87%
• EPS Growth: 52.54%
• Country: UK
• Employees: 23
• Sector: Financial
• Sector Strength: 79
• Industry: Financial - Credit Services
• EPS (TTM): 0.11
• Shares Outstanding: 21,354,168
• 10 Day Avg. Volume: 67,518
• 30 Day Avg. Volume: 40,575
• PEG Ratio: 0.07
• Price to Book (P/B): 0.39
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -5.02
• 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: N/A
• Number of Analyst Covering: 0

• Rating: 71 Outperform
• Price Target: 56.00p ▲(10.89%Upside)

Orchard Funding's strong technical momentum and undervaluation are the key strengths, supported by solid financial performance. However, high leverage and overbought technical indicators pose potential risks.

Orchard Funding Business Overview & Revenue Model

Company Description

Orchard Funding Group plc, through its subsidiaries, provides insurance premium finance, professional fee funding, and finance services in the United Kingdom. It offers credit to businesses and consumers to spread the cost of their insurance premiums; and professional customized fee funding solutions to accounting firms, professionals, and small businesses to spread the costs of their professional fees. The company was founded in 2002 and is based in Luton, the United Kingdom.

How the Company Makes Money

Orchard Funding Group PLC generates revenue primarily through interest income and fees related to its lending activities. The company offers insurance premium finance, which allows customers to pay their insurance premiums in installments, rather than in a lump sum, with Orchard Funding earning interest on these financed amounts. Additionally, the company provides professional fee funding, enabling clients to spread the cost of professional service fees over a set period, again generating interest income. Key revenue streams include interest charged on financed amounts and any associated service fees. Partnerships with insurance brokers and professional service firms are significant in distributing Orchard's funding solutions and expanding its client base, thereby contributing to its earnings.

Orchard Funding Financial Statement Overview

Summary

Orchard Funding exhibits strong revenue growth and effective cost management, indicated by solid gross and EBIT margins. However, high leverage and negative cash flows may hinder financial flexibility. Profitability metrics are satisfactory but reducing debt and improving cash flow conversion could stabilize finances.

Income Statement

Orchard Funding shows a positive revenue growth trajectory with a 22.59% increase from 2023 to 2024, indicating strong top-line expansion. The company maintains healthy gross and EBIT margins at 55.74% and 21.92%, respectively, highlighting effective cost management and operational efficiency. However, a slight decrease in net profit margin to 16.38% suggests some pressure on net income growth.

Balance Sheet

Orchard Funding has a high debt-to-equity ratio of 2.13, indicating significant leverage which could pose financial risk. The return on equity is decent at 8.35%, suggesting moderate profitability for shareholders. The equity ratio stands at 27.32%, reflecting a stable but low equity base relative to total assets.

Cash Flow

The company faces challenges with negative free cash flow, though it has improved from the previous year. The operating cash flow to net income ratio is unfavorable, indicating potential issues in converting income into cash. The free cash flow to net income ratio is also negative, highlighting cash flow management concerns.

Breakdown
TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement		Total Revenue
10.31M	9.64M	7.86M	6.19M	4.60M	5.28M
	Gross Profit
10.18M	5.37M	4.14M	4.78M	3.37M	4.68M
	EBIT
5.70M	2.11M	2.24M	1.88M	1.05M	2.20M
	EBITDA
5.82M	2.23M	2.22M	1.94M	1.12M	2.29M
	Net Income Common Stockholders
2.31M	1.58M	1.71M	1.52M	839.00K	1.27M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
908.00K	1.48M	2.55M	4.80M	2.17M	2.30M
	Total Assets
70.36M	69.19M	61.88M	48.84M	32.44M	29.89M
	Total Debt
40.56M	40.22M	34.72M	25.52M	12.32M	11.08M
	Net Debt
39.65M	38.74M	32.17M	20.73M	10.15M	8.78M
	Total Liabilities
49.90M	50.25M	44.13M	32.16M	16.64M	14.29M
	Stockholders Equity
20.43M	18.90M	17.75M	16.68M	15.80M	15.60M
Cash Flow		Free Cash Flow
-1.57M	-6.14M	-10.72M	-9.94M	-652.00K	6.04M
	Operating Cash Flow
-1.57M	-5.47M	-10.66M	-9.92M	-649.00K	6.07M
	Investing Cash Flow
-158.00K	-628.00K	-97.00K	-16.00K	-78.00K	-20.00K
	Financing Cash Flow
2.29M	5.03M	8.51M	12.56M	597.00K	-5.89M

Orchard Funding Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 50.50
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:ORCH, the sentiment is Positive. The current price of 50.5 is above the 20-day moving average (MA) of 44.48, above the 50-day MA of 39.79, and above the 200-day MA of 30.10, indicating a bullish trend. The MACD of 3.78 indicates Negative momentum. The RSI at 84.08 is Negative, neither overbought nor oversold. The STOCH value of 81.65 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:ORCH.

Orchard Funding Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DFCH	76 Outperform	£65.09M	5.01	13.00%	―	26.02%	340.22%
TIME	74 Outperform	£53.66M	9.95	7.96%	―	21.71%	31.07%
ORCH	71 Outperform	£10.78M	4.72	11.96%	10.00%	17.87%	52.54%
Sector *	64 Neutral	$12.83B	9.78	7.78%	16985.64%	12.26%	-7.81%

Orchard Funding Corporate Events

Orchard Funding Group Reports Robust Half-Year Financial Results

Orchard Funding Group PLC reported a strong financial performance for the half-year ending January 2025, with significant increases in revenue and profit. The company nearly doubled its profit before tax compared to the previous year, driven by increased lending volumes and improved interest margins. Despite the competitive market and geopolitical uncertainties, the company remains optimistic about maintaining its growth trajectory. The board decided to pay an interim and special dividend, reflecting the company’s robust performance.