A few points worth noting: Citi has a buy on LVT with a target price of $1.13. In their latest report dated 12/10 they are forecasting ASR (should be ARR now) of $75m for 4Q2020 which will be announced 21 months from now. Compare this to ALU which has a market cap. of $2.9b for forecast revenue for FY19 of $170m, ie a market. cap to revenue multiple of 17. Apply this multiple to LVT's forecast ARR of $75m gives a market cap. of $1.275b then compare divide by current market cap. of $256m, gives a multiple of 5 times the current share price. And 5 times the current share price of $0.47 equals $2.35. No one's got a crystal ball but if they achieve ARR of $75m then a fair share price target based on the ALU example is $2.35, and according to Citi this could be reached in less than two years. It would be easy to mount an argument that if ARR of $75m is achieved in this time frame then LVT deserves a higher multiple as the company would be growing at a much faster rate than ALU, so the above could in fact be viewed as somewhat conservative. SaaS companies are the future and this one has the most potential of the Australian-listed ones I reckon.
LVT Price at posting:
47.0¢ Sentiment: Buy Disclosure: Held
