One way to estimate that is to back calculate it from an assumed EV/EBITDA multiple and an assumed EBITDA margin. If we assume 8x EV/EBITDA is fair and take an EBITDA margin of 10% (which is roughly double the current normalised numbers: i.e. $0.7m for H1FY22), one arrives at a fair revenue multiple of 0.8x (8 x 0.1).
Those are simply some back-of-the-envelope numbers to get a 40,000-foot view of where we are right now relative to what is fair. Of course, one might argue that the US business is loss-making and that if AMX can get that side of the business under control the EBITDA margin may end up much higher, but for the moment it is circa 6% on a normalised basis ($0.7 x 2 / 22) across the business and so a 10% margin seems fair.
My other reservation here is that the market size is very small being only $80m for MetroMap and only $50m for LiDAR. However, the market size for 3D is much higher to be fair. If we combine the $80m and $50m, we get to a $130m market size. Given AMX has about 15% share versus NEA at 85% share, that suggests a fair value of around ~$19.5m. But, again, that assumes the current status quo remains constant. AMX's opportunity is to steal share off its much larger competitor, Nearmap.
AMX Price at posting:
25.5¢ Sentiment: None Disclosure: Not Held
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