Focusrite (TUNE) AI Stock Analysis

• Market Cap: £98.19M
• Dividend Yield: 3.94%
• Average Volume (3M): 115.50K
• Price to Earnings (P/E): 49.7
• Beta (1Y): 1.22
• Revenue Growth: -3.88%
• EPS Growth: -83.28%
• Country: UK
• Employees: 565
• Sector: Consumer Cyclical
• Sector Strength: 69
• Industry: Leisure
• EPS (TTM): 0.03
• Shares Outstanding: 59,211,640
• 10 Day Avg. Volume: 91,152
• 30 Day Avg. Volume: 115,498
• PEG Ratio: -0.51
• Price to Book (P/B): 0.88
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 10.74
• 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: £182.00
• Price Target Upside: 8.66% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

• Rating: 59 Neutral
• Price Target: 175.00p ▲(4.48%Upside)

Focusrite's score is driven by financial challenges, particularly in cash flow and profitability, which weigh heavily on the overall assessment. Technical analysis indicates neutral to slightly bearish momentum, while valuation metrics suggest the stock may be overvalued despite a decent dividend yield. Recent corporate events provide some optimism with revenue growth and strategic initiatives, contributing positively to the score.

Focusrite Business Overview & Revenue Model

Company Description

Focusrite plc develops and markets hardware and software products primarily for audio professionals and amateur musicians in North America, Europe, the Middle East, Africa, and internationally. It operates through Focusrite, Focusrite Pro, Novation, ADAM Audio, Martin Audio, and Sequential segments. The company provides audio interface and other products for musicians under the Focusrite and Focusrite Pro brands; and products that are used in the creation of electronic music using synthesisers, grooveboxes, controllers, and software and apps under the Novation and Ampify brands. It also manufactures and distributes professional monitoring and loudspeaker technology under the ADAM Audio brand; performance ready systems for auditoriums under the Martin Audio brand; and analogue synthesizers under the Sequential brand. The company sells its products through distributors, retailers, and system integrators, as well as directly to end users through its e-commerce platform and in-app software. Focusrite plc was founded in 1985 and is headquartered in High Wycombe, the United Kingdom.

How the Company Makes Money

Focusrite makes money through the sale of its audio equipment and related software products. Its primary revenue streams include the sales of audio interfaces, studio monitors, and music production hardware and software. The company's products are distributed globally through a network of retailers, distributors, and direct online sales. Focusrite also generates income from its professional audio solutions, which are used in recording studios, live sound environments, and broadcast industries. Significant partnerships with retailers and e-commerce platforms, as well as its strong brand reputation, contribute to its earnings. Additionally, the acquisition of related companies and expansion into new markets have been strategies to enhance revenue growth.

Focusrite Financial Statement Overview

Summary

Focusrite faces financial challenges with declining revenue and profitability. While the balance sheet remains stable with moderate leverage, the cash flow statement raises concerns with negative free cash flow. The company needs to address revenue growth and operational cost efficiency to improve financial health.

Income Statement

Focusrite's income statement shows declining revenues from 2022 to 2023, with a significant drop in net income and EBIT margins. The gross profit margin stood at 44.5% for 2023, which indicates adequate cost management. However, the net profit margin decreased to 1.6%, reflecting challenges in maintaining profitability amidst decreasing revenue.

Balance Sheet

The balance sheet is relatively stable with a debt-to-equity ratio of 0.37, indicating moderate leverage. The equity ratio is 57.1%, suggesting a solid equity base. Return on equity has declined due to lower net income, posing a challenge in maximizing shareholder value.

Cash Flow

Cash flow from operations decreased notably, and free cash flow turned negative in 2023, impacting liquidity. The operating cash flow to net income ratio is 4.25, indicating cash generation efficiency, but the free cash flow to net income ratio is negative, reflecting operational cash challenges.

Breakdown	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement
Total Revenue	158.52M	178.47M	183.73M	173.94M	130.14M
Gross Profit	70.49M	84.85M	83.28M	84.13M	59.89M
EBITDA	19.64M	36.88M	40.77M	45.92M	16.01M
Net Income	2.61M	17.80M	24.78M	28.28M	4.09M
Balance Sheet
Total Assets	202.94M	210.79M	177.53M	117.21M	104.70M
Cash, Cash Equivalents and Short-Term Investments	22.04M	26.79M	12.76M	17.34M	14.97M
Total Debt	42.88M	37.92M	21.90M	-248.00K	11.64M
Total Liabilities	86.99M	92.34M	72.22M	32.87M	47.80M
Stockholders Equity	115.96M	118.45M	105.32M	84.35M	56.90M
Cash Flow
Free Cash Flow	-3.14M	11.94M	-4.04M	31.91M	27.00M
Operating Cash Flow	11.10M	26.33M	8.46M	38.52M	36.61M
Investing Cash Flow	-16.73M	-21.54M	-22.60M	-20.56M	-44.92M
Financing Cash Flow	1.31M	10.19M	8.83M	-15.59M	8.41M

Focusrite Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 167.50
• 50DMA: Negative
• 100DMA: Positive
• 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:TUNE, the sentiment is Negative. The current price of 167.5 is below the 20-day moving average (MA) of 169.08, below the 50-day MA of 170.59, and below the 200-day MA of 197.64, indicating a bearish trend. The MACD of 0.11 indicates Positive momentum. The RSI at 46.33 is Neutral, neither overbought nor oversold. The STOCH value of 40.69 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:TUNE.

Focusrite Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IGR	67 Neutral	£71.94M	5.78	4.42%	―	-10.76%	―
Sector *	64 Neutral	£1.71B	10.36	6.12%	3.42%	0.55%	-32.84%
G4M	62 Neutral	£46.99M	56.42	2.14%	―	-3.30%	―
TUNE	59 Neutral	£98.19M	49.70	1.70%	3.94%	-3.88%	-83.28%
TPT	58 Neutral	£72.75M	―	-93.27%	4.32%	6.55%	-1914.81%
WJG	51 Neutral	£63.52M	48.31	-0.29%	―	-27.17%	98.73%
VCP	41 Neutral	£78.86M	―	486.49%	―	-11.73%	-62.35%

Focusrite Corporate Events

Focusrite PLC Announces Change in Major Holdings

Focusrite PLC has announced a change in its major holdings, with Liontrust Investment Partners LLP acquiring or disposing of voting rights. As of May 6, 2025, Liontrust holds a total of 15.0697% voting rights in Focusrite, indicating a slight increase from previous holdings. This adjustment in voting rights could influence Focusrite’s strategic decisions and impact stakeholders, reflecting Liontrust’s continued interest in the company’s governance.

Focusrite Issues Correction to Interim Dividend Timetable

Focusrite plc has issued a correction to its interim dividend timetable initially announced on 29 April 2025. The corrected dates state that the interim dividend of 2.1p will be paid on 9 June 2025, with the ex-dividend date set for 8 May 2025, and the record date on 9 May 2025. This correction ensures that shareholders have accurate information regarding the dividend schedule, maintaining transparency and trust with its stakeholders.

Focusrite Reports Revenue Growth Amidst Volatile Market Conditions

Focusrite plc reported a 5.2% increase in revenue for the six months ending February 2025, driven by a 9.9% rise in Content Creation revenue, despite a 5.8% decline in Audio Reproduction revenue. The company attributes its growth to successful new product launches, normalizing inventory levels, and strategic measures to mitigate US tariff impacts. Despite macroeconomic uncertainties, particularly in the US, Focusrite remains confident in meeting its full-year expectations, supported by a strong product pipeline and strategic pricing and manufacturing adjustments.