NextVison Stabilized Systems, Ltd. develops, manufactures, and markets stabilized day and night cameras for ground and aerial vehicles. The company was incorporated in 2009 and is based in Kfar Saba, Israel.

Israel

NextVison Stabilized Systems, Ltd.

Consumer Cyclical

The company tries to pay dividends regularly but only sometimes does so. It has paid dividends in roughly half the past ten years. Dividend per share (DPS) has grown yearly, but the dynamics are somewhat mixed. In the past 12 months, the dividend yield has barely been above zero and was substantially below that of its peers. At the same time, the average five-year yield has been significantly higher and exceeded nearly all its peers. The company distributes nearly all its profit as dividends (payout ratio above 90%, a negative factor). It will not be easy to sustain such an extreme payout ratio. It may also indicate a company's lack of profitable growth opportunities, which suggests doubtful prospects. On average, the company pays dividends annually. 

NXSN.TA reported revenue of USD 115mn in the last 12 months, up 121% from FY23. The dynamics of cash flow, as measure by free cash flow (FCF), were rather similar. EPS grew 126% from FY23 to USD 0.79.

The stock's performance has been mixed in the past six months, with growth following a decline. There is no clear price trend compared to its global peers from the same sector and industry (as shown above). The stock has outperformed this peer group by 141ppts over past six months and grown 0ppts faster in the past month. This is largely true for peers from the same country and sector. With respect to the stock's valuation against its peers, its overall price performance is 'fair'.

The company has reported very strong EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 66.4% in the last 12 months, up from 59.0% in FY23. 

Historically, NXSN.TA has reported very strong net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 57.8%, a growth from 53.1% in FY23. 

NextVison Stabilized Systems, Ltd. reported a return on equity (RoE) of 61.0% in the last 12 months, up from 40.4% in FY23. 

Another important profitability metric, return on assets (RoA), amounted to 51.9% in the last 12 months, an increase from 34.3% in FY23. 

In the last 12 months, the return on capital employed (RoCE) grew to 60.7%, above the peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 6.8 in the past several years. This ratio implies a excellent 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.

NXSN.TA has poor trading liquidity. The average private investor can sell his common position in the stock almost immediately. Liquidity is usually stable and becomes extremely unfavourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. The stock has a tiny market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is low. We note resilient historical revenue growth, robust profitability, solid return on capital, strong debt servicing capacity, adequate interest coverage, solid cash flow generation, and an favourable capital structure, among the positive credit factors. Among the negative credit factors and we point to excessive margin volatility, poor working capital management.

In highly turbulent market conditions, NXSN.TA is exceptionally volatile. In other words, the stock will be among the worst-performers in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be critical. 

In normal market circumstances, NXSN.TA is highly volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will change somewhat erratically. The stock's losses on its worst days (less than 1-5% of the time) will range from limited to substantial. 

Based on key historical and expected multiples, the stock is slightly undervalued relative to its peers. In particular, the stock is overpriced on P/E, 'expensive' on EV/EBITDA, undervalued on P/FCF. 

NextVison Stabilized Systems, Ltd.

ILA 9397

5

NextVison Stabilized Systems, Ltd.

ILA 9397

5

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

ILA 9397

About

About

About

About