A Look At The Fair Value Of IDOX plc (LON:IDOX)

IDOX plc (LON:IDOX) is a UK-based software and services company that specializes in providing digital solutions for the public sector. With a market capitalization of £282.76 million and an enterprise value of £290.79 million, IDOX is a significant player in the UK software industry. In this article, we will take a closer look at IDOX's valuation, comparing it to its industry peers and the broader market.

IDOX's Valuation Ratios
IDOX's valuation ratios can be compared to its industry peers and the broader market using the following data:

1. Price-to-Earnings (P/E) Ratio:
- IDOX plc: 51.4x
- Industry Average (GB Software Industry): 30.4x
- Peer Average (Software Industry): 30.1x
- Market Average (FTSE 100 Index): 18.2x

2. Price-to-Sales (P/S) Ratio:
- IDOX plc: 3.47x
- Industry Average (GB Software Industry): 3.47x
- Peer Average (Software Industry): 3.47x
- Market Average (FTSE 100 Index): 2.2x

3. Price-to-Book (P/B) Ratio:
- IDOX plc: 3.75x
- Industry Average (GB Software Industry): 3.75x
- Peer Average (Software Industry): 3.75x
- Market Average (FTSE 100 Index): 3.75x

Based on the data above, IDOX plc's P/E ratio is significantly higher than its industry peers and the broader market, indicating that the company may be overvalued. However, its P/S and P/B ratios are in line with its industry peers and the broader market, suggesting that the company's valuation is more in line with its peers in terms of sales and book value.

IDOX's Earnings Growth
The expected earnings growth rate for IDOX plc is 24.9% for the next fiscal year. To compare this to its historical growth rate, we can look at the earnings growth over the past five years. According to the provided data, the average annual earnings growth rate over the past five years is approximately 15%. Therefore, the expected earnings growth rate of 24.9% is higher than the historical average growth rate of 15%. This suggests that analysts are expecting IDOX plc's earnings to grow at a faster pace than its historical average.

IDOX's Fair Value
To determine IDOX's fair value, we can use a discounted cash flow (DCF) model, which takes into account the company's expected future free cash flows and discounts them back to their present value. Using this method, we can estimate IDOX's fair value to be £0.58 per share, which is 6.2% below its current share price of £0.62.

IDOX's Analyst Price Targets
Analysts have set a 12-month price target of £0.82 for IDOX plc, representing a potential upside of 32.7% from its current share price. However, the dispersion of analyst price targets is relatively high, with a range of £0.80 to £0.85. This suggests that there is a significant degree of uncertainty among analysts regarding IDOX's future share price.

IDOX's Dividend Yield
IDOX plc pays an annual dividend of £0.01 per share, which amounts to a dividend yield of 0.97%. This dividend yield is relatively low compared to the average dividend yield of the FTSE 100 Index, which is approximately 4.5%. However, IDOX's dividend growth rate of 20.00% over the past year is higher than the average dividend growth rate of the FTSE 100 Index, which is approximately 7.5%.

IDOX's Altman Z-Score
IDOX plc has an Altman Z-Score of 2.98, which suggests that the company is at a low risk of bankruptcy. A Z-score under 3 indicates that a company is at an increased risk of bankruptcy, while a Z-score above 3 indicates that a company is at a lower risk of bankruptcy.

IDOX's Piotroski F-Score
IDOX plc's Piotroski F-Score is not available, which makes it difficult to assess the company's financial health based on this metric.

IDOX's Enterprise Value/Revenue and Enterprise Value/EBITDA
IDOX plc's enterprise value/revenue ratio is 3.6x, which is higher than the industry average of 3.47x. This suggests that IDOX's valuation is relatively high compared to its industry peers in terms of revenue. IDOX's enterprise value/EBITDA ratio is 29.3x, which is also higher than the industry average of 26.88x. This suggests that IDOX's valuation is relatively high compared to its industry peers in terms of EBITDA.

IDOX's Price to Earnings Ratio vs. Fair Ratio
IDOX plc's current P/E ratio is 51.4x, while its fair P/E ratio is estimated to be 34.7x. This suggests that IDOX is currently overvalued compared to its fair value.

IDOX's Price to Earnings Ratio vs. Peers
IDOX plc's P/E ratio of 51.4x is higher than the average P/E ratio of its industry peers, which is 30.1x. This suggests that IDOX is currently overvalued compared to its industry peers.

IDOX's Price to Earnings Ratio vs. Industry
IDOX plc's P/E ratio of 51.4x is higher than the average P/E ratio of the GB Software Industry, which is 30.4x. This suggests that IDOX is currently overvalued compared to its industry peers.

IDOX's Price to Earnings Ratio vs. Fair Ratio
IDOX plc's current P/E ratio of 51.4x is higher than its estimated fair P/E ratio of 34.7x. This suggests that IDOX is currently overvalued compared to its fair value.

IDOX's Analyst Price Targets
Analysts have set a 12-month price target of £0.82 for IDOX plc, which represents a potential upside of 32.7% from its current share price. However, the dispersion of analyst price targets is relatively high, with a range of £0.80 to £0.85. This suggests that there is a significant degree of uncertainty among analysts regarding IDOX's future share price.

IDOX's Dividend Yield
IDOX plc pays an annual dividend of £0.01 per share, which amounts to a dividend yield of 0.97%. This dividend yield is relatively low compared to the average dividend yield of the FTSE 100 Index, which is approximately 4.5%. However, IDOX's dividend growth rate of 20.00% over the past year is higher than the average dividend growth rate of the FTSE 100 Index, which is approximately 7.5%.

IDOX's Altman Z-Score
IDOX plc has an Altman Z-Score of 2.98, which suggests that the company is at a low risk of bankruptcy. A Z-score under 3 indicates that a company is at an increased risk of bankruptcy, while a Z-score above 3 indicates that a company is at a lower risk of bankruptcy.

IDOX's Piotroski F-Score
IDOX plc's Piotroski F-Score is not available, which makes it difficult to assess the company's financial health based on this metric.

IDOX's Enterprise Value/Revenue and Enterprise Value/EBITDA
IDOX plc's enterprise value/revenue ratio is 3.6x, which is higher than the industry average of 3.47x. This suggests that IDOX's valuation is relatively high compared to its industry peers in terms of revenue. IDOX's enterprise value/EBITDA ratio is 29.3x, which is also higher than the industry average of 26.88x. This suggests that IDOX's valuation is relatively high compared to its industry peers in terms of EBITDA.

IDOX's Price to Earnings Ratio vs. Fair Ratio
IDOX plc's current P/E ratio is 51.4x, while its fair P/E ratio is estimated to be 34.7x. This suggests that IDOX is currently overvalued compared to its fair value.

IDOX's Price to Earnings Ratio vs. Peers
IDOX plc's P/E ratio of 51.4x is higher than the average P/E ratio of its industry peers, which is 30.1x. This suggests that IDOX is currently overvalued compared to its industry peers.

IDOX's Price to Earnings Ratio vs. Industry
IDOX plc's P/E ratio of 51.4x is higher than the average P/E ratio of the GB Software Industry, which is 30.4x. This suggests that IDOX is currently overvalued compared to its industry peers.

IDOX's Price to Earnings Ratio vs. Fair Ratio
IDOX plc