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Stock Analysis & ValuationOxford Metrics plc (OMG.L)

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£57.60
Sector Valuation Confidence Level
Low
Valuation methodValue, £Upside, %
Artificial intelligence (AI)53.82-7
Intrinsic value (DCF)24.43-58
Graham-Dodd Method0.18-100
Graham Formula0.01-100

Strategic Investment Analysis

Company Overview

Oxford Metrics plc (LSE: OMG.L) is a UK-based technology company specializing in software solutions for infrastructure asset management and motion measurement. Operating through its Vicon Group and Yotta Group segments, the company serves diverse markets, including engineering, entertainment, life sciences, and public infrastructure. The Vicon Group focuses on high-precision motion capture technology used in film production, sports analysis, and biomechanics research. Meanwhile, the Yotta Group provides cloud-based asset management software for government agencies and infrastructure contractors, optimizing maintenance and operational efficiency. With a global presence across 70 countries, Oxford Metrics combines innovation with practical applications, making it a key player in niche software markets. The company rebranded from OMG plc in 2017, reflecting its evolution into a metrics-driven technology leader. Headquartered in Yarnton, UK, Oxford Metrics continues to expand its footprint in high-growth sectors where data accuracy and asset lifecycle management are critical.

Investment Summary

Oxford Metrics plc presents a mixed investment profile. With a market cap of £73.7 million and a beta of 0.76, it offers lower volatility compared to broader tech stocks. Revenue of £41.5 million and net income of £0.8 million in the last fiscal year indicate modest profitability, though diluted EPS of 0.57p suggests limited earnings per share growth. The company maintains a strong cash position (£20.7 million) against manageable debt (£3.8 million), providing financial flexibility. However, negative operating cash flow (-£0.4 million) and capital expenditures (-£1.6 million) raise questions about near-term cash generation. The dividend yield (3p per share) may appeal to income-focused investors, but growth prospects depend on expanding its niche software offerings in competitive markets. Investors should weigh its stable infrastructure segment against the higher-growth but riskier motion capture business.

Competitive Analysis

Oxford Metrics operates in two distinct but complementary segments, each with unique competitive dynamics. In motion capture (Vicon Group), it competes with larger players like Qualisys and smaller innovators such as OptiTrack. Vicon’s strength lies in its high-accuracy systems, widely adopted in film (e.g., Hollywood VFX) and biomechanics research. However, it faces pricing pressure from low-cost alternatives and must continually invest in R&D to maintain technological leadership. The Yotta Group’s infrastructure software competes with GIS and asset management providers like Hexagon and Bentley Systems. Yotta’s cloud-based platform differentiates through user-friendly interfaces and UK government contracts, but scalability outside its core markets remains a challenge. Oxford Metrics’ dual-segment approach diversifies revenue but also splits focus. Its competitive advantage stems from deep domain expertise and long-term customer relationships, though it lacks the scale of multinational software firms. The company’s ability to cross-sell solutions (e.g., motion data for smart infrastructure) could unlock synergies, but execution risks persist in integrating these niches.

Major Competitors

  • Qualisys AB (QRTEA): Qualisys is a key competitor in motion capture, known for its real-time tracking systems. It excels in sports and medical applications but lacks Vicon’s entrenched position in entertainment. As a privately held firm, it has less financial transparency but can pivot faster without shareholder pressure.
  • Hexagon AB (HXGBF): Hexagon’s Geosystems division overlaps with Yotta’s infrastructure management tools. Hexagon dominates with global scale and advanced sensor integration, though Yotta’s UK-focused solutions offer localized compliance advantages. Hexagon’s R&D budget dwarfs Oxford Metrics’, posing a long-term threat.
  • Bentley Systems (BSY): Bentley leads in infrastructure engineering software, competing indirectly with Yotta. Its stronghold in civil engineering and 3D modeling contrasts with Yotta’s maintenance-focused approach. Bentley’s larger partner network gives it an edge in multinational projects, but its complexity can deter smaller clients.
  • OptiTrack (Private): OptiTrack offers cost-effective motion capture hardware, appealing to indie studios and academia. While less precise than Vicon’s systems, its affordability erodes Vicon’s market share in budget-sensitive segments. OptiTrack’s parent company (NaturalPoint) benefits from vertical integration with VR/AR markets.
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