Thanks marns Cannot disagree with your calculations. The share...

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Greg7270

288 Posts.

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30/05/18

18:23

Post #: 33384007
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Originally posted by marns ↑

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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Thanks marns

Cannot disagree with your calculations. The share price went back up to 69 cents based on the positive half yearly report.

Maybe just a sell down by retail investors for tax loss purposes as the volumes have been very low.

It has been difficult to comprehend the sell off over the last couple of months.

Probably will not see much of re-rate until EOFY update but until then I do not any point in selling.

PRO Price at posting: 45.5¢ Sentiment: Buy Disclosure: Held
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(20min delay)
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)

PRO (ASX) Chart

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Thanks marns Cannot disagree with your calculations. The share...

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