Hi, I'm sure you've followed my previous posts where I've...

Refinitiv Eikon

Hi, I'm sure you've followed my previous posts where I've clearly set out assumptions, data, financials and valuation - which you're free to agree/disagree with. As I've consistently said, the lens I applied was conservative and I still got to a ~$1.30 valuation by the end of FY2023.

Since that time, more data has come out including a few Zoleo order updates and the last quarterly. While I'm still being conservative, the new data sets and information has forced me to UPGRADE my numbers to reflect these orders and rebase at a stronger run rate. The orders provide a HIGH LEVEL OF CERTAINTY on future sales. The timing might be slightly out but the orders are there.

For additional context, Zoleo has more FORWARD orders than sales that they've made historically. Total orders stand at 115k (see below). The annual report shows total sales since the start of 40k implying AT LEAST 75,000 future sales or almost 2x over the next 12 months. That does not include future orders which are likely based on the run rate.




So what does that mean for my numbers? At a high level I've upgraded Australian sales now that the two major states are out of lockdown. North America I've re-based to a slightly higher level but also kept it consistent at 28k per period i.e. no growth, which is conservative, and I've increased my estimates for Rest of World.

As you can see from the growth rates, there's nothing too crazy there and we have line of site up to the end of FY22 and into the start of FY2023 so we know they're correct (apart from minor timing issues that could occur re billing)

So what does this do to the valuation? Well, higher equipment sales means increased HIGH MARGIN subscribers. I haven't changed any assumptions on ARPU or churn (note: I've updated this periods churn level to 8.5% per guidance but that's immaterial)

My FY2023 EPS goes to 15.3c. I'm using a 15x multiple, so my PE valuation is ~$2.30. My blended valuation, which is an average of PE, EV/EBITDA and ARR/Sales has increased from ~$1.30 to ~$2.



@Veecat has posted some numbers recently and they're not crazy. My FY2024 valuation on the same multiples almost doubles to $3.70 - this is a business with extremely strong tailwinds that is and will be VERY high margin.

GLTAH