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FirstGroup (FGROY)
OTHER OTC:FGROY
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FirstGroup
(OTC:FGROY)
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Rating:67Neutral
Price Target:
$3.00
▲(7.91% Upside)
FirstGroup's overall stock score reflects a strong financial recovery and reasonable valuation, offset by current bearish technical indicators. The company's improved financial performance and attractive dividend yield are significant strengths, while the technical analysis suggests caution due to current market momentum.
FirstGroup (FGROY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.51B
Dividend Yield3.08%
Average Volume (3M)0.00
Price to Earnings (P/E)10.2
Beta (1Y)0.42
Revenue Growth9.08%
EPS GrowthN/A
CountryUS
Employees30,000
SectorIndustrials
Sector Strength72
IndustryRailroads
Share Statistics
EPS (TTM)0.15
Shares Outstanding562,530,800
10 Day Avg. Volume0
30 Day Avg. Volume0
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap1.71
Enterprise Value/Revenue0.53
Enterprise Value/Gross Profit1.10
Enterprise Value/Ebitda10.17
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusHold
Number of Analyst Covering0
FirstGroup Business Overview & Revenue Model
Company DescriptionFirstGroup plc provides public transport services in the United Kingdom and the United States. The company operates through First Bus and First Rail segments. The First Bus segment offers local bus services with a fleet of approximately 4,900 buses in the United Kingdom. The First Rail segment operates a passenger rail network that provides long-distance, commuter, regional, and sleeper services through a portfolio of Great Western Railway, South Western Railway, TransPennine Express, and Avanti West Coast franchises; passenger rail services; and hull trains and Lumos. FirstGroup plc was founded in 1986 and is based in London, the United Kingdom.
How the Company Makes MoneyFirstGroup generates revenue primarily through the provision of public transport services. Its revenue streams include ticket sales from bus and rail operations, contracts with local and regional governments for transport services, and charter services for educational institutions and other organizations through First Student. In North America, Greyhound contributes to revenue through intercity bus services. The company also benefits from partnerships with governmental bodies, which often subsidize certain routes to maintain service levels in less profitable areas. Additionally, FirstGroup engages in operational efficiencies and cost management strategies to enhance profitability.
FirstGroup Earnings Call Summary
Earnings Call Date:Jun 10, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Dec 11, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a balanced outlook with strong financial performance and growth initiatives in bus and open access rail, complemented by significant sustainability achievements. However, challenges such as government policy changes and reduced funding create headwinds, balancing the overall sentiment.Q2-2025 Updates
Positive Updates
Strong Financial Performance in Bus and Rail
First Bus achieved an 8% adjusted operating profit margin in the first half, aiming for 10% in the second half. Revenue growth was supported by a 4% increase in passenger volumes. Open Access Rail showed double-digit revenue growth, with Hull Trains and Lumo exceeding expectations in financial performance.
Sustainability and Electrification Progress
FirstGroup has been upgraded to an AAA ESG ranking by MSCI, reflecting significant investments in electrifying its bus fleet and depot infrastructure.
Increased Shareholder Returns
An interim dividend increased by 13% to 1.7p per share was announced along with a new GBP 50 million share buyback program.
Acquisitions and Expansion
First Bus acquired Anderson Travel and Lakeside Coaches, expanding its footprint in the adjacent services market. It also acquired track access rights from Grand Union for a new open access rail service.
EPS Growth and Financial Metrics
Earnings per share increased by 4.9 percentage points year-on-year to 8.5p. The group generated GBP 72.1 million in capital from operations in a seasonally lower first half.
Negative Updates
Challenges with Government Policy Changes
The government policy changes, including the nationalization of train operating companies, pose challenges, potentially reducing earnings from DfT TOCs.
Impact of Reduced Government Funding
Lower government grant funding impacted revenue, offsetting some growth in bus and open access rail.
Cost Inflation in Bus Operations
Bus operations faced a 3% underlying cost inflation, particularly in driver wages and engineering staff.
Rail Nationalization Uncertainty
The process and timing for the nationalization of train operating companies remain unclear, potentially affecting future operations and revenue.
Company Guidance
During the FirstGroup Q2 2025 earnings call, executives Graham Sutherland and Ryan Mangold provided comprehensive guidance on the company's performance and future expectations. The interim dividend increased by 13% to 1.7p per share, reflecting strong confidence in the strategy. They reported an 8% increase in underlying revenues for the continuing business, with a goal to reach a 10% adjusted operating profit margin in the second half. The bus division notably improved, achieving an 8.0% operating margin, up from 7.1% the previous year. FirstGroup announced a GBP 50 million share buyback program, showing commitment to returning excess capital to shareholders. Despite planned government policy changes, they aim to maintain earnings per share for the full year 2026. The company received an AAA ESG ranking from MSCI and has been advancing bus fleet electrification rapidly. Open Access operations, Hull Trains and Lumo, demonstrated significant revenue growth, with seat capacity utilization above the national average. The group is actively seeking growth opportunities, both organic and inorganic, in bus and rail sectors, while preparing for potential impacts from bus franchising and rail nationalization policies.FirstGroup Financial Statement Overview
Summary
FirstGroup exhibits a commendable financial recovery with strong revenue and profit growth, improved cash flow management, and a better leverage position. While high debt levels and past profitability issues remain areas to watch, the company is on a positive trajectory with significant operational improvements over recent years.Income Statement
FirstGroup's income statement reflects a solid performance with a strong recovery trajectory. Gross profit margin improved significantly due to increased operational efficiency, and the net profit margin turned positive, indicating a return to profitability. Revenue growth has been consistent over the years, showcasing a robust upward trend. EBIT and EBITDA margins have shown improvement, reflecting increased profitability. However, the past negative net income and EBIT in earlier years highlight the challenges faced during the pandemic.75
Positive
Balance Sheet
The balance sheet demonstrates a moderate financial position. The debt-to-equity ratio has decreased, indicating improved leverage, yet it remains relatively high, which could pose a risk. Return on equity has improved, reflecting better utilization of equity capital. The equity ratio suggests a moderate level of financial stability, though there's room for improvement in reducing liabilities.70
Positive
Cash Flow
FirstGroup's cash flow statement shows strong operational cash flow and impressive free cash flow growth. The operating cash flow to net income ratio is healthy, indicating effective cash generation relative to earnings. The free cash flow to net income ratio also supports solid cash flow performance. Past challenges are evident from lower free cash flow in earlier years, but recent improvements highlight a solid cash position moving forward.80
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 4.85B | 4.65B | 4.26B | 3.86B | 2.93B | 1.74B |
| Gross Profit | 2.34B | 1.81B | 1.57B | 829.30M | 0.00 | -1.16B |
| EBITDA | 253.40M | 849.80M | 656.30M | 896.70M | 875.40M | 1.15B |
| Net Income | 100.80M | 127.50M | -15.90M | 87.10M | 636.40M | 78.40M |
Balance Sheet | ||||||
| Total Assets | 3.54B | 3.66B | 3.81B | 4.41B | 3.83B | 8.29B |
| Cash, Cash Equivalents and Short-Term Investments | 436.80M | 171.40M | 496.50M | 791.40M | 787.70M | 1.44B |
| Total Debt | 1.40B | 1.35B | 1.63B | 2.07B | 1.41B | 3.82B |
| Total Liabilities | 2.84B | 2.95B | 3.17B | 3.66B | 2.95B | 7.14B |
| Stockholders Equity | 690.40M | 696.70M | 633.30M | 740.20M | 876.60M | 1.18B |
Cash Flow | ||||||
| Free Cash Flow | 471.30M | 597.80M | 324.00M | 395.90M | -186.20M | 814.80M |
| Operating Cash Flow | 646.00M | 754.20M | 543.30M | 573.80M | 65.40M | 1.20B |
| Investing Cash Flow | -65.00M | -150.90M | -10.20M | 79.40M | 2.08B | -270.00M |
| Financing Cash Flow | -808.00M | -641.50M | -776.30M | -640.90M | -2.89B | -357.90M |
FirstGroup Technical Analysis
Neutral
2.78
Price Trends
2.94
Negative
2.95
Negative
2.54
Positive
Market Momentum
-0.05
Positive
40.73
Neutral
14.23
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FGROY, the sentiment is Neutral. The current price of 2.78 is below the 20-day moving average (MA) of 2.89, below the 50-day MA of 2.94, and above the 200-day MA of 2.54, indicating a neutral trend. The MACD of -0.05 indicates Positive momentum. The RSI at 40.73 is Neutral, neither overbought nor oversold. The STOCH value of 14.23 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for FGROY.
FirstGroup Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $283.28M | 8.10 | 22.67% | ― | -7.03% | 397.79% | |
75 Outperform | $33.85B | 28.76 | 11.07% | 0.49% | 4.40% | 14.69% | |
69 Neutral | $1.41B | 6.36 | 16.16% | 2.72% | 0.71% | 84.57% | |
67 Neutral | $1.51B | 10.18 | 18.42% | 3.08% | 9.08% | ― | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
62 Neutral | $2.26B | 24.44 | 10.47% | 4.30% | -22.95% | -40.67% | |
47 Neutral | $178.08M | -11.01 | ― | ― | -6.00% | -12.45% |
* Industrials Sector Average
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.