I agree that it needs to drop down to reflect the less than expected black friday/xmas sales and GST overclaim, but there seems to be nothing to suggest that full year FY22 EBITDA won't be achieved? Or do you think this December impact will severely reduce the likelihood of reaching FY22 forecast EBITDA, making it overvalued?
If the IPO price of 1.53 was x16.1 forecasted EBITDA earnings, then its current price at 1.64 suggests a 17.2 PE ratio (assuming forecast EBITDA is reached). Even if we be overly conservative reduce EBITDA forecast by 20%, it would still likely keep it's future PE ratio below 30.
Given that they expect sales revenue to grow 21-25% for FY22, and break into US market next year, I think anything below a PE ratio of 30/35 is sensible. As long as there is that double digit revenue growth over the next 3-5 years and if they can quickly fix the logistical issues before they go hard overseas, then anything within a PE ratio of 30-35 surely cannot be overvalued?
Happy to hear another opinion.
STP Price at posting:
$1.67 Sentiment: Buy Disclosure: Held
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