The CEO said the target is to go to 100 stores from a present 60. With 60 stores at a NP of just circa 23m, assume NP grows 67% to 38m based on 100 stores, plus organic growth from population increase & improved branding & visibility, as well as improved margins due to the roll out of the white label products. I think its reasonable BBN can double its profit within the next 5 years to roughly 50m. Discount 50m at the risk free rate of inflation & the present value divided by the current market cap gives a ratio of 15.87. Although thats the risk free rate. There is nothing risk free about retail. If you use the pre covid SP of around $3.6 and a 10% discount rate the present earnings ratio is around 16.6
If you think the execution to 100 stores will be fine then I can see why you would own the stock at this price. Perhaps you might even think 50m is a conservative estimation 5 years out. In which case BBN looks cheap.
Although 5 years is a long time and if you want to apply a fair discount rate to a fair earnings assumption it look like the SP may have overshot the runway. This is one of the stocks that is blitzing the market as a whole which itself is going gangbusters.
I cant help but fell the highlighted is where the SP should be. I dont agree with the explosion above the ASX 200 following the covid recovery.
Price 5.29 (current)
risk free rate 1.5% 1 1 0 2 2 0 3 3 0 4 4 0 5 5 $50.00 6 discounted $45.73 7 Forward Ratio 15.87 8 Market Cap 725M
Price 3.69 (pre covid high)
risk free rate 10.0% 1 1 0 2 2 0 3 3 0 4 4 0 5 5 $50.00 6 discounted $28.22 7 Forward Ratio 16.60 8 market cap 469M
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Last
$1.83 |
Change
-0.015(0.82%) |
Mkt cap ! $248.2M |
Open | High | Low | Value | Volume |
$1.83 | $1.86 | $1.82 | $42.85K | 23.39K |
Buyers (Bids)
No. | Vol. | Price($) |
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4 | 2090 | $1.83 |
Sellers (Offers)
Price($) | Vol. | No. |
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$1.83 | 52 | 4 |
View Market Depth
No. | Vol. | Price($) |
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2 | 2021 | 1.825 |
3 | 1176 | 1.820 |
3 | 622 | 1.815 |
5 | 5924 | 1.810 |
1 | 900 | 1.805 |
Price($) | Vol. | No. |
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1.835 | 177 | 3 |
1.840 | 1766 | 4 |
1.845 | 566 | 3 |
1.850 | 552 | 5 |
1.855 | 1444 | 2 |
Last trade - 12.00pm 30/04/2024 (20 minute delay) ? |
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Last
$1.83 |
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Change
-0.015 ( 1.08 %) |
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Open | High | Low | Volume | ||
$1.83 | $1.85 | $1.82 | 1999 | ||
Last updated 12.17pm 30/04/2024 ? |
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