SCL 0.00% 46.0¢ schrole group ltd

Coming from a company which has kept investors in the dark with...

  1. 6,871 Posts.
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    Coming from a company which has kept investors in the dark with very long periods of silence besides quarterlies , this is very encouraging they are changing approach and at least trying to create some interest with investors so not sure how they can faulted here. Speculation , buzz , potential is extremely important when investing in this neck of woods . They have talked up a big game with better margins and a great sales team they say, It has been trading at around a $12 to $15 million Market Cap for a while now, well funded lets see if they can finally deliver for investors this year.
    As released in December on Stock head

    “If we were to apply this multiple to our FY21 revenue forecast of $5.86 million ( revenue came in lower for FY21 at $5.5million but according to this metric still well undervalued ) , the Edtech peer valuation is $0.028 per share,” the RaaS report noted.

    “At the current share price Schrole Group is trading at a significant discount to two groups of observed SaaS peers.”



    https://hotcopper.com.au/data/attachments/4144/4144236-53f8332d0b52127286d9b991141879cb.jpg


    https://hotcopper.com.au/data/attachments/4144/4144214-8314b245dfd53fe05898c7d987455e98.jpg
    SCL has targeted expansion in average contract value per customer from ~$10k pa to ~$30kpa through increased cross-sell of its new SaaS offerings.
    “Our estimates assume that FY22 marks an inflection point in the earning trajectory of the business,” the RaaS report noted.

    Higher discounted cashflow valuation

    RaaS found the discounted cashflow methodology was the best way to value SCL, given its “early-stage nature”.

    Discounted cash flow (DCF) is a valuation method used to estimate the value of an investment based on its expected future cash flows.

    Using the DCF method derives a base value for SCL of $0.035 per share, which equates to a market value for the company just shy of $50 million.

    “Our valuation implies an EV/sales multiple of 8.2x SCL’s FY20 revenues and 7.9x our FY21 revenue forecast which would put it at a premium to the peer group multiples discussed,” the report noted.

    “However, we note that more than 60% of these peers are still in loss-making while our expectation is for Schrole Group to move into profitability in H1 2022.”


 
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