A valuation which still discounts a cautious scenario, page-25

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saintex

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13/05/24

15:25

Post #: 73799469
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Originally posted by daicosisgod: ↑

From Bell Potter.....hope it helps

Positive trading update Integrated Research (IR) provided an unexpected trading update late last week which was positive and included unaudited results for the 10 months to 30 April 2024: Revenue up 11% to $61.4m; EBITDA up 93% to $13.9m; and Total contract value (TCV) up 8% to $59.1m. The company noted that, as indicated at the release of the 1HFY24 result in February, the 2HFY24 result is skewed towards new contract wins. Supporting that outlook, IR said it has secured $8.4m in new TCV for the first four months of H2, including six new customers predominantly in the Americas and Collaborate portfolio. It also added that it “anticipates making further progress on executing its solid pipeline of new, new to existing and contract renewal opportunities” in May and June.

Upgrades IR also unusually provided forward guidance for FY24 of revenue b/w $76-85m (vs BPe $73.7m), EBITDA b/w $18-25m (vs BPe $13.5m) and TCV b/w $75-84m. On the back of the positive trading update and guidance we have upgraded our revenue and EBITDA forecasts in FY24, FY25 and FY26 by 6%, 8% and 4% and 39%, 61% and 45%. We now forecast FY24 revenue and EBITDA of $78.2m and $18.8m which is towards the lower end of the guidance ranges. We note the low end of the guidance ranges assumes only renewals whereas the high end includes risk weighted new contract wins.

+Investment view:
PT up 44% to $0.95, Maintain BUY On the back of the positive update and guidance we have increased the multiples we apply in the PE ratio and EV/EBITDA valuations from 9.0x and 7.0x to 9.5x and 7.25x and also reduced the WACC we apply in the DCF from 10.3% to 10.2%. The net result is a 44% increase in our PT to $0.95 which is >15% premium to the share price so we maintain our BUY recommendation.
We note the outlook for the stock is positive given the solid pipeline of new opportunities, the renewal pipeline in FY25 is similar to FY24 (and includes JPMC) and the growing cash levels.

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Thanks very much for that D.

IRI Price at posting: 78.5¢ Sentiment: Buy Disclosure: Held
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(20min delay)
Last 61.0¢		Change -0.005(0.81%)		Mkt cap ! $106.4M

Open	High	Low	Value	Volume
62.0¢	62.0¢	60.0¢	$86.70K	142.9K

Buyers (Bids)

No.	Vol.	Price($)
1	22611	60.0¢

Sellers (Offers)

Price($)	Vol.	No.
63.0¢	11587	2

View Market Depth

No.	Vol.	Price($)
1	22611	0.600
2	4580	0.590
3	11700	0.580
2	33335	0.575
3	39278	0.570

Price($)	Vol.	No.
0.630	11587	2
0.660	20765	2
0.670	17271	2
0.680	16505	1
0.690	1380	1

Last trade - 15.00pm 04/11/2024 (20 minute delay)

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A valuation which still discounts a cautious scenario, page-25

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A valuation which still discounts a cautious scenario, page-25

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