Well that's the exact problem - it's been two years talking about $30m revenue to turn a profit, and I'm guessing at least another 6 months before the next acquisition comes along, and then another few more quarters before we find out whether management can really deliver on that promise.
What if it doesn't deliver at the end?
Looking to EV/Revenue multiple as at yesterday's numbers:
- JBH (making a profit): 0.55
- DSH (making a profit): 0.31
- GEG (making a small loss relative to revenue): 0.33
- SHP (making a big loss relative to revenue): 0.19
But when you factor in ~68m shares in earn-outs going to one Lorenzo Coppa at around today's price over the next 12 months assuming eStore hits its acquisition targets (has the bar been set high enuf), you're looking at around 0.3x based on $26.5m revenue target.
Market doesn't give a toss about SHP acquires 10 more businesses or $100m more revenue from now, as we've all seen by now post YHD/Wowbaby/Warcom/eStore. Re-rate will only happen when SHP can prove that they can turn a sustainable profit quarter-on-quarter.
6% annual organic growth (from $25m to $26.5m), on par with NAB online business index, is not gonna cut it either.
BTW who's managing the hire-and-fire, when there's $2m of salary cost?
Sentiment changed to hold, now with $600k EBITDA loss forecast.
Re-hashing Danbradster's earlier point - this ain't rocket science or brain surgery.
HT8 Price at posting:
1.3¢ Sentiment: Hold Disclosure: Held
