I agree with Mr-Chow that, in early 2020, IHR was valued at a price/sales ratio of 70. However, the current price/sales ratio is approximately 3. I think that the ratio of 70 was way too high and representative of an over-inflated market that was buoyed by ultra-low interest rates and the aspiration of a new golden era for tech shares. I suggest that created an extreme over-valuation.
However, I propose that a price/sales ratio of 3 represents an extreme under-valuation and is a reflection of the whole tech market falling markedly due to increased rates. IHR is still delivering and ARR grew at over 100% in FY22 on the background of high customer retention. I believe the true valuation lies somewhere between a price sales valuation of 3 and 70. A valuation of about 10 times price sales seems reasonable to me. Do your own research but I'm confident IHR will rebound to these levels over the next year or so as the market sees the ongoing success of the core IHR product.
IHR Price at posting:
7.3¢ Sentiment: Hold Disclosure: Held
