DW8 Growth, page-13743

It seems an unfortunate choice of wording by @ShadowMonarch as Blue Ocean Equities (BOE) in their analysis focuses heavily on the next 2 years out in their DCF model based forecast to derive the current (NPV) SP estimate, and not a 2 year period SP forecast as was most likely by error implied.

DCF models provide the NPV at the current moment in time, it's not a time range based estimate, and BOE placed the NPV per share at 7c in March 2022 for the reasons highlighted below.



The revision from the previous 9c a share price target to 7c (that occurred 2 months ago) was due to largely the changes in their nearest earnings forecasts (due to 1H FY22 effects) and some higher than expected (largely non-recurring) costs also in 1H FY22 (which the company addressed in detail). Also note that there was no revision to the FY23 numbers which means the reason the SP estimate really changed was due to the most recent events which carry by definition the highest weight in a DCF model.

BOE also didn't include any changes to rate cards which is expected to bump up revenue by several percent, the ability to pass on inflation rates fuel charge cost increases to customers, cost savings being implemented by mgmt now that are expected to take out $3m per annum from the current cost basis (maybe more going forward if this is directly related to PMOC margin rather than fixed costs) and other items such as revenue expected to be generated cross selling products and services to former Kaddy clients. I'll let everyone run the figures themselves, but even if you just want go with BOEs forecast, then the shares are currently trading at 60% discount to their current NPV implying a 150% upside from here (based on currently available information).