I agree there are some challenges with cashflow. However, improvements started in Q4 22 and the benefits should continue to flow through to reducing the cash outflow in Q1 23 and beyond. The biggest risk to the SP is further dilution of value through a capital raise. The planned cost reduction and ongoing increases in revenue should alleviate the need for this. However, I believe a larger buffer, than the current $5.5 million cash reserves, would reassure the markets. The total lifetime customer value for IHR was quoted at $94 million in the presentation. That should be enough to get them a loan of $5 million to provide this buffer.
Do your own research but I believe that overall, the business looks really promising. This is a SaaS company on a current capitalisation/ARR ratio of just over three. While the market is out of favour with IT companies at the moment the underlying fundamentals are strong.
IHR Price at posting:
8.2¢ Sentiment: Hold Disclosure: Held
