Investors who read my post on 3 November 2023 (Post #: 70717155)...

Investors who read my post on 3 November 2023 (Post #: 70717155) should not be surprised by the recent share price strength.

IMO, the re-rating since then is only half done. That post said about expected FY24 EBITDA results: "At a 5x value/EBITDA, Acrow would be worth around 5 x $75M = $375M. It is currently on a market cap of around $232M." The market cap is now $314M, just over half way in a little over 2 months. I think it will be the August FY24 results that will help close the gap.

Just to recap how ridiculous the pricing was: In early November, Acrow was on a forward P/E of around 6.9 (using my own normalised FY24 NPAT measure which subtracted assumed share-based payments of $3.2M and assumed NPAT growth of only 20%). This level of P/E does not match Acrow's exceptional EPS growth rates of 79% in FY22 and 63% in FY23.

It's hard to find a better compounder than Avita. Its share price is now 5.7 times higher than when I bought in early 2020, and FF dividends have gone up around 4 times in 3.5 years from 0.7cents in May 2020 to 2.7cents in November 2023. I see no reason why this compounding won't continue given ROIC of over 20% and Acrow's ability to continue investing in its business at very high rates of return.