Manchester United plc (NYSE: MANU)

Sector: Communication Services Industry: Entertainment CIK: 0001549107
Market Cap 2.72 Bn
P/B 10.81
P/E -49.15
P/S 3.04
ROIC (Qtr) 0.10
Div Yield % 0.00
Rev 1y % (Qtr) 0.75
Total Debt (Qtr) 1.02 Bn
Debt/Equity (Qtr) 4.07

About

Manchester United plc, popularly known as Manchester United, is a professional football club based in Old Trafford, Greater Manchester, England. The company is listed on the New York Stock Exchange (NYSE) under the ticker symbol MANU and is one of the most successful and popular sports teams globally, with a rich history dating back to 1878. Manchester United operates in the sports industry and generates revenue through three principal sectors: Commercial, Broadcasting, and Matchday. The Commercial sector includes sponsorship and retail, merchandising,...

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Price action

Investment thesis

Bull case

  • Operating cash flow of 88.52M provides strong 138.78x coverage of stock compensation 637837.84, indicating sustainable incentive practices.
  • Tangible assets of 912.06M provide robust 32.44x coverage of other current liabilities 28.12M, indicating strong asset backing.
  • Operating cash flow of 88.52M provides strong 101.40x coverage of tax liabilities 872972.97, showing excellent fiscal position.
  • Cash reserves of 108.73M provide comfortable 124.55x coverage of tax obligations 872972.97, showing strong fiscal management.
  • Operating cash flow of 88.52M provides strong 3.60x coverage of inventory 24.58M, indicating efficient inventory management.

Bear case

  • Operating cash flow of 88.52M barely covers its investment activities of (352.56M), with a coverage ratio of -0.25, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 88.52M provides insufficient coverage of deferred revenue obligations of 304.06M, which is 0.29x, raising concerns about future service delivery capabilities.
  • High receivables of 267.39M relative to inventory of 24.58M (10.88 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • Free cash flow of (369.56M) provides weak coverage of capital expenditures of 458.08M, with a -0.81 ratio suggesting additional external financing needs for growth initiatives.
  • Operating cash flow of 88.52M provides minimal -7.48x coverage of tax expenses of (11.83M), suggesting potential tax planning inefficiencies or unsustainable tax positions.

Peer comparison

Companies in the Entertainment
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 NFLX Netflix Inc 398.09 Bn 38.16 9.18 14.46 Bn
2 DIS Walt Disney Co 204.13 Bn 16.46 2.16 42.03 Bn
3 WBD Warner Bros. Discovery, Inc. 70.69 Bn 145.75 1.87 33.52 Bn
4 FWONA Liberty Media Corp 53.12 Bn -399.43 13.15 7.04 Bn
5 LYV Live Nation Entertainment, Inc. 33.40 Bn 103.67 1.36 9.39 Bn
6 FOXA Fox Corp 33.26 Bn 16.34 2.02 6.60 Bn
7 PSKY Paramount Skydance Corp 18.94 Bn -1,353.00 0.66 14.73 Bn
8 TKO TKO Group Holdings, Inc. 17.56 Bn 76.76 4.05 4.04 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 2.00 1.53
EV to Cash from Ops. EV/CFO 52.66 25.10
EV to Debt EV to Debt 4.55 5.03
EV to EBIT EV/EBIT 79.44 165.24
EV to EBITDA EV/EBITDA 15.94 -156.71
EV to Free Cash Flow [EV/FCF] EV/FCF -12.61 72.07
EV to Market Cap EV to Market Cap 1.71 2.12
EV to Revenue EV/Rev 5.20 6.42
Price to Book Value [P/B] P/B 10.81 2.40
Price to Earnings [P/E] P/E -49.15 -114.33
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.00 1.03
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 -17.28
Dividend per Basic Share Div per Share (Qtr) 0.00 0.14
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 7.73
Interest Coverage Int. cover (Qtr) 0.47 -38.17
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -50.69 -33.75
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -44.75 248.04
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 0.52
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 230.92 -100.15
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 64.49 -28.24
EBIT Growth (1y) % EBIT 1y % (Qtr) 242.02 -85.91
EBT Growth (1y) % EBT 1y % (Qtr) 46.94 24.10
EPS Growth (1y) % EPS 1y % (Qtr) 52.05 18.31
FCF Growth (1y) % FCF 1y % (Qtr) -93.72 118.70
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 5.25 30.85
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.52 0.60
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.04
Cash Ratio Cash Ratio (Qtr) 0.10 0.45
Current Ratio Curr Ratio (Qtr) 0.31 1.09
Debt to Equity Ratio Debt/Equity (Qtr) 4.07 1.01
Interest Cover Ratio Int Coverage (Qtr) 0.47 -38.17
Times Interest Earned Times Interest Earned (Qtr) 0.47 -38.17
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 38.90 -65.26
EBIT Margin % EBIT Margin % (Qtr) 4.84 -79.53
EBT Margin % EBT Margin % (Qtr) -7.49 -82.47
Gross Margin % Gross Margin % (Qtr) 100.00 35.56
Net Profit Margin % Net Margin % (Qtr) -6.20 -83.18