Israir Group Ltd. operates airlines in Israel. The company operates scheduled and charter flights to various destinations in Europe. It also organizes cruise tours, and tours and vacations for youngsters; and offers ski packages in various destinations in Europe, English summer school packages, and boutique premium travel services, as well as books tickets for sports and concerts events. The company was incorporated in 1990 and is based in Tel Aviv, Israel.

Israel

Israir Group Ltd

Industrials

The company does not pay dividends at all, or it pays them sporadically. There have only been a few years with dividend payments in the past ten years. 

ISRG.TA reported revenue of USD 453mn in the last 12 months, up 16% from FY23. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS grew 27% from FY23 to USD 0.09.

Over the last six months, the stock performance has varied, with an increase following a drop. The stock's price trend wasn't definitive when matched against its global counterparts from the same sector and industry (as depicted above). Over the past six months the stock has exceeded the performance of this peer group by 35ppts and its growth decelerated by 1ppts in the past month. There is a distinction between the stock's performance and that of its peers from the same country and industry. Over six months it exceeded the performance of this peer group by 4ppts and accelerated its growth by 1ppts in the recent month. Given the stock's valuation versus its peers, its total price movement is mildly favourable.

The company has reported modest EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 13.0% in the last 12 months, up from 10.1% in FY23. 

Historically, ISRG.TA has reported weak net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 4.8%, a growth from 4.4% in FY23. 

Israir Group Ltd reported a return on equity (RoE) of 26.6% in the last 12 months, down from 28.0% in FY23. 

Another important profitability metric, return on assets (RoA), amounted to 6.3% in the last 12 months, an increase from 5.9% in FY23. 

In the last 12 months, the return on capital employed (RoCE) grew to 12.5%, above the peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 1.2 in the past several years. This ratio implies a average shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

ISRG.TA has above average trading liquidity. The average private investor can sell his common position in the stock immediately. Liquidity is usually stable and remains extremely favourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. Another factor to consider is the substantial number of days with zero trading volumes, i.e., without any ability to sell a position. The stock has a small market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is minimal. We note resilient historical revenue growth, solid return on capital, and solid cash flow generation, among the positive credit factors. Among the negative credit factors, we point to bleak profitability, poor working capital management, and an unfavourable capital structure.

In highly turbulent market conditions, ISRG.TA is not overly volatile. In other words, the stock will fall less than the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be low. 

In normal market circumstances, ISRG.TA is moderately volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will move slightly wider than the index. The stock's losses on its worst days (less than 1-5% of the time) will range from low to mild. We would also like to highlight the mild intraday volatility of the instrument. 

Based on key historical and expected multiples, the stock is greatly undervalued relative to its peers. Specifically, the stock is 'cheap' on P/E, undervalued on EV/EBITDA, underpriced on P/FCF. 

Israir Group Ltd

ILA 205.1

5

Israir Group Ltd

ILA 205.1

5

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

ILA 205.1

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