Getting close to 1x revenue multiple on low volumes trades. I...

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Stweeve

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28/03/24

12:45

Post #: 73103041
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Originally posted by hilly_sandman: ↑

Unfortunately 8CO have shown poor scaleability and it would seem that they are taking a loss on the implementation costs for future revenue streams, this is okay but they need to start showing some scaleability because the significant revenue increases forecast by manangement over the last 2-3yrs have not occurred...

In my mind its trading where it is because of three reasons;
1. Risk with near single source of revenue (Gov is large slice of pie) - but counter of this is that it should be decade long sticky
2. No cash, 8CO would struggle to roll out in new large enterprise customer given the significant effort and spend on employment for the roll out. $800k cash and a director loan may not cut it. Risk of CR looms for sure
3. Management inaccuracy with forecasts. Covid was an external uncontrollable event, however the constant guidance to large growth and profitability has in hindsight been poor guidance from management and this is reflected in the share price

With this said, its trading at A$9M market cap for call it A$5M in SaaS revenue, and maybe A$8M total revenue.

The thing I have constantly struggled with in valuing 8CO, is trying to understand the true scaleability. All expenses are in the Staff and the Admin and Corp costs in the 4C, and they provide no breakdown between implementation expense and the expense of running the core SaaS platform.

Without some sort of guidance you simply cannot figure out gross profit prior to implementation expense, need more transparency here.

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Getting close to 1x revenue multiple on low volumes trades. I agree, valuation impossible at the moment. Enough of "next quarter". Let's get some real clarity in next month's 4c including a full year guidance.

SAP should just pay up $20m for the Fed Gov contract and put us out of our misery.

8CO Price at posting: 3.6¢ Sentiment: Hold Disclosure: Held
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(20min delay)
Last 3.3¢		Change 0.003(10.0%)		Mkt cap ! $7.395M

Open	High	Low	Value	Volume
3.3¢	3.3¢	3.3¢	$660	20K

Buyers (Bids)

No.	Vol.	Price($)
1	30000	3.1¢

Sellers (Offers)

Price($)	Vol.	No.
3.3¢	33000	1

View Market Depth

No.	Vol.	Price($)
1	30000	0.031
1	47852	0.030
1	34000	0.029
1	2200	0.028
1	100000	0.027

Price($)	Vol.	No.
0.033	33000	1
0.034	88350	1
0.035	19999	1
0.040	23500	1
0.045	47730	1

Last trade - 11.33am 06/05/2024 (20 minute delay)

8CO (ASX) Chart

Getting close to 1x revenue multiple on low volumes trades. I...

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