Dear all,
Appreciate the commentary thus far and was hoping to hear some thoughts re full year earnings expectations, especially given the lack of guidance.
By my calculations, I have a target price of c. 80c. This can be broken down into two parts:
1. 2018 Full Year EPS estimate of 5.7c
- c.15% growth in revenue on the LTM reported revenue of 10.3m, or 30% increase in revenues from the 9.2m recognised in 2017.
- c.22% growth in EBITDA from LTM to $5m
- Uncertainty surrounding potential tax costs - would appreciate suggestions/comments
- At the current trading multiple of 10x, we arrive at value of 57c offering some upside from current price
2. Potential P/E re-rating
- Basket of comps with similar attributes (can share criteria if desired) trade at an average P/E of 18x
- Discounting this by 20% to account for PRO's questionable track record, we reach a multiple of 14x
- Expect this re-rating to occur if PRO executes on its current strategy and outperforms this half and 2019H1
- Target price = 80c, with upside up to $1 if it returns to its industry peers at 18x
- Similar result when compared on an EV/EBITDA multiple
Key risks/discussion points;
- EPS estimate may be too bullish...
- Lack of guidance given by management. Believe this is a good thing, indicating prudence by management so they can surprise to the upside, instead of fall into the trap of overpromising and underperforming as they have done in the past
- Underpinned by a good structural thematic of cyber security and systems performance, which will only become more important and a bigger focus of businesses
- Potential M/A ?
- Key sales personnel or sales contract risk?
- Continued software investment or increased competition leading to margins compression?
Can't see much downside from here, but let me know if I am missing something. However, definitely concerned by the lack of a solid institutional investor on the register...
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Last
65.0¢ |
Change
0.010(1.56%) |
Mkt cap ! $47.85M |
Open | High | Low | Value | Volume |
65.0¢ | 65.0¢ | 65.0¢ | $956 | 1.471K |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
3 | 7574 | 63.5¢ |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
65.0¢ | 15803 | 1 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
3 | 7574 | 0.635 |
1 | 15000 | 0.630 |
1 | 12363 | 0.605 |
2 | 3336 | 0.600 |
1 | 13500 | 0.560 |
Price($) | Vol. | No. |
---|---|---|
0.650 | 15803 | 1 |
0.680 | 20145 | 2 |
0.690 | 10000 | 1 |
0.745 | 5377 | 2 |
0.750 | 51333 | 2 |
Last trade - 10.46am 18/09/2024 (20 minute delay) ? |
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