Hi All
Recently stumbled across this firm randomly and wanted to do a deep dive as it looks wildly undervalued. Especially I found the 75% deal too good to be true here is some of the things I have found.
- They are on a runrate of $50 million odd revenue per year, Acquisition finalised late feb and completed 4.6 million revenue by March 31. Concerns I have is $1 million Depreciation in same period. However is EBITDA going to be the best metric to prove profitability?
- FCF is stated at 61% of EBITDA in their latest preso, I think this will show cashflows potentially inwards of 6-7 million in 22/23
- Net Profit however will be much smaller and probably around +- 1 million
- Growth trajectory is currently very large with the latest deal and looking to white label ATM's
- This is operating on about 30 Million EV fully diluted, 500 SOI and 400 million options plus there is a net shortfall of current assets to current liabilities of $9million
- Is it undervalued? in my opinion I think it is currently but discounted for execution risk. If we hit these guidance targets I see no reason why this cannot be a value of $80-100 Million EV. I think the net current ratio will be 0 by end of march 2023. Therefore you can do the maths on $20 million fully diluted MC versus the potential target listed above.
These are my thoughts and musings and is opinion only.
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