@joewolf,
I think that what is overlooked with this stock is that it once was rated by the market on P/E multiples in the high-teens (in the decade after the GFC when it was a small cap darling and formed a large part of the small cap index).
By comparison, before the result, the stock was trading at just 10x P/E and even today, after the sharp share price rise since the result, it is only at about 11.5x.
Now I don't think anything near high-teens is the right multiple for this stock (especially not now with it carrying more debt than it has historically... although, at a touch above 2.0x Net Debt to EBITDA, it doesn't pose any existential threat to the company).
At a stretch, I think it's a market multiple stock, so around 15x-16x, but more realistically a 10% to 15% discount-to-market multiple, i.e.. 13x to 14x, doesn't sound unreasonable.
So I think it still has room to re-rate upwards by around 15% to 20% from its current 11.5x level. Add in an additional 10% to 12% EPS growth in FY2024 from the normalisation of the business following the supply chain disruptions of the past 12 months, and you've still got some 25% upside to the share price, in my view.
By the above reckoning, the fundamental value of the stock is around $12.00.
/
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$9.77 |
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Open | High | Low | Value | Volume |
$9.82 | $9.87 | $9.74 | $2.664M | 272.2K |
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No. | Vol. | Price($) |
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1 | 433 | $9.75 |
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Price($) | Vol. | No. |
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1 | 433 | 9.750 |
1 | 102 | 9.740 |
1 | 57 | 9.730 |
2 | 1116 | 9.720 |
3 | 1404 | 9.710 |
Price($) | Vol. | No. |
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9.780 | 954 | 2 |
9.800 | 1036 | 1 |
9.810 | 1036 | 1 |
9.820 | 1036 | 1 |
9.830 | 1036 | 1 |
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Change
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