Interesting that a profit downgrade disguised as an upgrade gets...

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Jausty1919

571 Posts.

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28/06/23

15:37

Post #: 68516170
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Originally posted by Access2020: ↑

Interesting that a profit downgrade disguised as an upgrade gets a small bid - very clever.

I think the positive reaction is from the top line, which was a beat against the only analyst that covers the stock. The market has been looking for whether the cost of living will start to bite education and has used data points from Cluey [ASX:CLU] (which is saying the market is tough) as a proxy, noting that Kip do not do many releases.

So in effect, the fact that revenue has not only held up, but has grown is positive and a classic example of a 'not bad news' release, which is actually good news. I think the next 6 months is the key though. That's when either we'll see the inflection that the company anticipates or people will reduce their spending due to higher interest rates. It could really go either way tbh.

Still interesting to watch but no hurry to own yet based on my previous comments on this company. Agree with @stocking that it could be a takeover target and that would help a few funds exit but it's likely they'd take hit. If you add a 30% premium to today's price, the stock would still be trading around or at a lower value than 5 years ago. It's likely that the funds have higher average prices - just a guess though.

Anyway, I'll keep watching

Revenue: Beat
EBITDA: In line
NPAT: Small miss

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Interesting that a profit downgrade disguised as an upgrade gets a small bid - very clever

Can I please ask how you arrived at the conclusion that this guidance is a downgrade? I haven't seen any guidance other than "the second half will be more profitable than the first". Not sure if I've missed this somewhere?

KME Price at posting: 48.0¢ Sentiment: None Disclosure: Held
2 Upvote

0 Great analysis

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