On my numbers, 2.0c/share is an FY24e PE of 9x (assuming FY24 A$2.1m of NPAT). The share price could double from this level (4.0c) and the PE would still be below 20x. I'm not certain CXZ deserves a PE of 20x just yet, but I think 15x is reasonable given the growth trajectory, balance sheet and management team.
There's also the question of whether these profits will be reinvested - either way, I don't mind. I think Aaryn has earned the right* to reinvest profits and continue with his PBT>$0 re-investment strategy. *He has earned the right because he gradually has proven out the link between reinvestment and growth in gross profit, showing 8+ consecutive increases in quarterly gross profit through to an all-time high, all while remaining cash flow profitable.
In saying that, I'm very confident he'll let the profits through to the bottom line initially. The cost base is not going to immediately grow in line with this spike in revenue. So... I think the next few quarterlies will be absolutely bumper quarterlies for positive cashflow. CXZ is going to be a cashflow machine. Not bad for a tiny little Aussie SaaS business servicing one of the biggest automotive OEMs in the world. In my eyes, this is proof that well-managed nano-caps do exist!
P.S. To answer the question posed in the forum last week, Aaryn confirmed on the Straw man investor call that the GM "all in one" new platform is an increase in ARPU (average revenue per user).
CXZ Price at posting:
2.0¢ Sentiment: Buy Disclosure: Held
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)