AVA fundamental valuation, page-3

I actually pulled together a bit of an analysis today, as my last one had a margin too low for IMOD.

So the big question on AVAs valuation is whether its non-IMOD revenue is going to grow 3.73% QoQ (like it did Q1-Q2 this year), or more like 22% (like it did from Q4 20 to Q1 21). Where it sits in 2 quarters time is a massive difference depending on the two.

The other big factor is whether the forex headwinds continue or not. $1M a quarter is nothing to be sneezed at!

If I assumed IMOD margins were 90%, cost growth was ~5% and then applied either growth scenario to non-imod revenue, I got:

Q4 21 EBITDA of ~$1.5M in the 3.73% pq growth scenario, or $4.21M in the 22% pq growth scenario.

As a run rate, then applying a 15x multiple, I get an SP of either $0.37 or $1.03 - A huge difference in target price.

Now, if forex becomes more favourable and we get an extra $4M EBITDA per annum, then targets are more like $0.61 and $1.2.

An average of all 4 scenarios is $0.82, so ~58% from Fridays price.

Not bad - But we need to keep a good eye on non-IMOD growth over the next two quarters as if its flat, we could see even more price correction. If its good, then it doubles.