At more than 40x FY2021 prospective P/E and almost 30x prospective EV/EBIT, I certainly wouldn't describe that sort of valuation as representing a great opportunity.
By my reckoning, the company's earnings will need to grow by 15%pa for the next 4 years to reach the sorts of multiples which I think are fair and reasonable (viz., 25x P/E and 15x EV/EBIT).
Don't get me wrong: I like the business. A lot.
It's just the valuation I don't like.
Of course, I might be completely wrong in thinking in terms of 15%pa earnings growth over the next 4 years.
With the legacy licencing business now approaching irrelevance, the overall growth rate of the company will be akin to the growth rate of its SaaS offering, namely 15%pa at the Revenue line which, given the operating leverage inherent in the P&L, would translate into closer to 18% to 20%pa at the bottom line.
I think that only in that decidedly bullish case, could 40x P/E and 30x EV/EBIT could be justified as being reasonably attractive.
.
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- H1 FY21 Report - Guidance for Continuing Strong Growth
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H1 FY21 Report - Guidance for Continuing Strong Growth, page-5
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Last
$40.00 |
Change
0.350(0.88%) |
Mkt cap ! $13.07B |
Open | High | Low | Value | Volume |
$39.50 | $40.13 | $39.18 | $9.266M | 233.2K |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
17 | 694 | $40.00 |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
$40.01 | 40 | 3 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
4 | 120 | 40.000 |
18 | 459 | 39.990 |
11 | 738 | 39.980 |
6 | 310 | 39.970 |
9 | 503 | 39.960 |
Price($) | Vol. | No. |
---|---|---|
40.020 | 132 | 6 |
40.030 | 421 | 15 |
40.040 | 459 | 11 |
40.050 | 342 | 8 |
40.060 | 251 | 4 |
Last trade - 14.01pm 29/07/2025 (20 minute delay) ? |
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