Saga plc (SAGA) AI Stock Analysis

• Market Cap: £168.87M
• Dividend Yield: N/A
• Average Volume (3M): 216.19K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.91
• Revenue Growth: 15.70%
• EPS Growth: -119.71%
• Country: UK
• Employees: 3,682
• Sector: Financial
• Sector Strength: 82
• Industry: Insurance - Diversified
• EPS (TTM): -1.06
• Shares Outstanding: 143,361,740
• 10 Day Avg. Volume: 296,255
• 30 Day Avg. Volume: 216,193
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.43
• Price to Cash Flow (P/CF): 2.10
• P/FCF Ratio: 2.10
• 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: 185.00p
• Price Target Upside: 47.53% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

Saga plc's financial performance shows recovery signs with strong revenue growth and improved cash flow. However, high debt levels and net losses remain concerns. Technical analysis indicates mixed signals with potential short-term weakness. Valuation is challenging due to net losses and no dividend yield. Positive corporate events, including debt refinancing and strategic partnerships, provide a boost to financial stability and future growth prospects.

Saga plc Business Overview & Revenue Model

Company Description

Saga plc is a UK-based company specializing in products and services for individuals aged 50 and over. The company operates in various sectors, including insurance, travel, and financial services. It offers a range of insurance products such as car, home, travel, and health insurance. Additionally, Saga provides travel services including ocean and river cruises, package holidays, and escorted tours. The company also delivers financial services, offering savings accounts, investment products, and equity release advice.

How the Company Makes Money

Saga plc generates revenue primarily through three key streams: insurance, travel, and financial services. The insurance sector is a significant contributor to its earnings, with products like car, home, and travel insurance driving sales through premiums. In the travel segment, Saga earns money by offering tailored travel experiences, such as cruises and package holidays, which customers purchase directly. The financial services division contributes through fees and commissions from offering savings accounts, investment products, and advisory services. Strategic partnerships with underwriters and travel providers enhance Saga's service offerings and broaden its market reach, thus supporting its revenue generation.

Saga plc Financial Statement Overview

Summary

Saga plc shows signs of recovery with strong revenue growth and improved cash flow management. However, persistent net losses and high financial leverage pose significant risks. The company needs to enhance profitability and reduce debt to ensure long-term stability.

Income Statement

Saga plc has shown mixed performance in its income statement. The gross profit margin improved substantially from past years, reaching 59.37% in the latest annual report, indicating efficient cost management. However, the net profit margin remains negative due to significant net losses, though it has improved from the previous year. Revenue growth is strong at 27.52%, showcasing a positive upward trend. EBIT and EBITDA margins are both negative, reflecting ongoing operational challenges.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 3.69, indicating significant leverage and potential financial risk. Stockholders' equity has decreased over the years, suggesting limited equity financing. The equity ratio is relatively low at 11.87%, which may affect financial stability. Return on equity is negative due to net losses, although reduced from prior levels, suggesting the need for improved profitability.

Cash Flow

Saga plc's cash flow statement shows improvement, with positive free cash flow growth of 264.26%, indicating better cash management. The operating cash flow to net income ratio is negative due to net losses but has improved significantly. The free cash flow to net income ratio is positive, reflecting better alignment between cash generation and net income. Overall, cash flows are stabilizing, but further enhancement is needed.

Breakdown
TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
804.20M	741.10M	581.10M	377.20M	337.60M	797.30M
	Gross Profit
240.00M	440.00M	262.70M	222.80M	229.80M	352.90M
	EBIT
463.00M	-24.50M	59.80M	27.40M	44.00M	129.90M
	EBITDA
-132.30M	67.70M	-188.90M	46.80M	-2.00M	-228.00M
	Net Income Common Stockholders
-148.10M	-113.00M	-259.20M	-28.00M	-67.80M	-312.80M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
224.30M	262.80M	239.30M	336.90M	206.80M	224.30M
	Total Assets
2.09B	1.88B	1.98B	2.30B	2.21B	2.09B
	Total Debt
664.60M	824.40M	895.50M	934.60M	823.80M	664.60M
	Net Debt
566.70M	635.70M	719.00M	707.70M	722.20M	566.70M
	Total Liabilities
1.51B	1.66B	1.61B	1.65B	1.53B	1.51B
	Stockholders Equity
588.20M	223.50M	369.50M	652.90M	680.70M	588.20M
Cash Flow		Free Cash Flow
52.40M	57.00M	-34.70M	27.60M	-363.50M	-203.40M
	Operating Cash Flow
74.60M	83.70M	-13.90M	46.50M	-78.40M	91.90M
	Investing Cash Flow
14.50M	18.00M	4.10M	-27.30M	-211.80M	-256.20M
	Financing Cash Flow
-145.70M	-73.80M	-54.20M	69.60M	318.00M	146.10M

Saga plc Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 125.40
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:SAGA, the sentiment is Positive. The current price of 125.4 is above the 20-day moving average (MA) of 124.00, above the 50-day MA of 124.07, and above the 200-day MA of 116.18, indicating a bullish trend. The MACD of 1.38 indicates Negative momentum. The RSI at 55.30 is Neutral, neither overbought nor oversold. The STOCH value of 42.75 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:SAGA.

Saga plc Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EZJ	75 Outperform	$3.26B	7.15	15.85%	3.11%	13.93%	40.22%
WTB	70 Outperform	£4.14B	17.96	6.45%	4.21%	3.75%	-22.77%
TRN	68 Neutral	$1.09B	22.65	17.46%	―	19.44%	146.58%
Sector *	64 Neutral	$12.70B	9.08	9.19%	4.89%	16.29%	-8.64%
IHG	61 Neutral	£11.61B	24.36	-27.16%	1.68%	3.55%	-14.32%
SAGA	48 Neutral	£168.87M	―	-72.14%	―	15.70%	-119.71%

Saga plc Corporate Events

Saga plc Refinances Debt with New Credit Facilities

Saga plc has announced the successful refinancing of its corporate debt by securing new long-term credit facilities. This move includes the redemption and cancellation of its £250.0m Senior Unsecured Notes and the repayment of a £75.0m loan facility, enhancing its financial stability and potentially strengthening its market position.

Saga plc Announces Leadership Change in Insurance Division

Saga plc has announced a change in its leadership, with Steve Kingshott transitioning from the role of Chief Executive Officer of Insurance to a specialist adviser position, focusing on the company’s partnership with Ageas for motor and home insurance broking. Lloyd East, the current Chief Operating Officer of Insurance, will succeed Kingshott as CEO of Insurance, pending regulatory approval. This leadership change highlights Saga’s strategic move to strengthen its insurance operations and leverage existing partnerships, potentially impacting its market positioning and stakeholder relationships.

Saga plc Reports Expected Profit Growth Amid Strategic Shifts

Saga plc has reported expected growth in underlying profit for the financial year ending in January 2025, with significant progress in its cruise and travel businesses. The company announced a new partnership with Ageas for its motor and home insurance operations, anticipating a short-term decline in Insurance Broking earnings. The sale of its Insurance Underwriting business is set to generate proceeds of £43 million, which will aid in reducing the company’s debt. Additionally, Saga has successfully refinanced its corporate debt, enhancing its liquidity and financial position.

Saga plc Secures Refinancing to Bolster Growth Plans

Saga plc has successfully refinanced its corporate debt, enhancing its liquidity position and increasing funding certainty as it embarks on its growth plans. The refinancing, secured through a £335 million term loan facility and additional credit provisions, is expected to strengthen Saga’s financial stability and operational flexibility as it moves forward, following its recent strategic partnership in insurance and the sale of its underwriting business.

Saga plc Announces Strategic Partnership and Sale of Underwriting Business to Ageas

Saga plc has announced a 20-year insurance partnership with Ageas and the sale of its Insurance Underwriting business, Acromas Insurance Company Limited, to Ageas. This strategic move aims to enhance Saga’s position in the insurance market by leveraging Ageas’s UK insurance expertise while optimizing Saga’s brand and customer base. The partnership is expected to drive growth in Saga’s motor and home insurance offerings, focusing on innovation and value for money. Furthermore, the transaction aligns with Saga’s long-term goals of reducing debt and enhancing shareholder value, while also strengthening its focus on the over 50s market.

Saga plc Announces Director Appointment to Persimmon Plc

Saga plc has announced that Anand Aithal, currently serving as an Independent Non-Executive Director at the company, will join Persimmon Plc as a Non-Executive Director starting January 2025. This move signifies a strategic appointment for Aithal, potentially enhancing Saga plc’s industry connections and influence through his expanded role in the sector.