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NEA

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$2.10 nearmap ltd

Applying the same 8.6 x Revenue multiple above and given the...

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nachode

121 Posts.

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14/03/18

16:34

Post #: 31752664
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Originally posted by nachode ↑

All good Reg.
In the 15 years Nachode has owned QPX/IPR/NEA the issue of a CR was never in play. Perhaps the new chairman is injecting some fresh culture, banging a drum and trying to get things moving. Rosscoe has definitely been asleep at the wheel and taken a backward step. This was clearly evident at the AGM when Ross got introduced to the new CFO for the first time which is odd given the new boy was appointed sometime beforehand.
Anyway, historically NEA has been valued at circa 8.6x Revenue as follows:

2014 Rev 17.8M x 8.15 = market cap $145
2015 Rev 23.6M x 8.9 = market cap $210
2016 Rev 30.7 x 8.6 = market cap $$264
source Commsec

If Newmo & Co can ramp up revenue say another 12M this FY then that should theoretically add another $100M to the market cap. That puts the share price at $1 but the market might otherwise build in a premium as they have done with Xero. Seems the market prefers revenue over EBITDA any other day of the week...

Cheers nach

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Applying the same 8.6 x Revenue multiple above and given the company had 2017 revenue of 40.6M we get a valuation of $350M or circa 92 cents per share.
2018 revenue say $52M x 8.6 = $447M or $1.18/share in 4 months. Current Market value = $405M so NEA probably undervalued on this anlysis...

Cheers
Nach

NEA Price at posting: $1.07 Sentiment: Buy Disclosure: Held
6 Upvote

1 Great analysis

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