https://www.raasgroup.com/Updated research report on commsgroup...

https://www.raasgroup.com/
Updated research report on commsgroup
Valuation of $0.18/share or $70m market cap fully-diluted
Both a DCF and peer multiple valuation are suitable for CCG. From a peer multiple
perspective using FY23 consensus estimates CCG is trading at a 6% discount to the average
listed (profitable) peers (6.4x EV/EBITDA) despite little Vodafone revenue but the associated
start-up costs, and little restructuring benefits. Recent M&A multiples (8.1x EV/EBITDA)
would imply a share price of $0.091/share. From a DCF perspective, CCG is profitable and
has transparency around expected divisional revenue growth rates, gross margins, and cost
growth. Our DCF has increased from $0.16/share to $0.18/share, driven by the cost
reductions, offset somewhat by some longer-term cost assumptions. Our DCF assumes
stable gross margins, growth in Microsoft Teams phone connections (including Vodafone).
As a sense check our DCF implies an FY25 PER of 14.0x and EV/EBITDA of 7.7x based on our
estimates.