Hi Everyone,Some of you may have seen an earlier post with some...

Hi Everyone,

Some of you may have seen an earlier post with some financial analysis (pre-HY results). I thought I'd reconcile what has changed plus some insight into my Fair Value Estimate.

Revised Fair Value Estimate = 2.6c (decrease from 3.4c)
As of Yesterday's close (1.4c) I think HSC is trading at ~54% discount

So what has changed in the Financial Model:

• As many of you will know, HSC business model has changed resulting in a different cost structure. I used historic data to inform my forecast and this has now been revised. Biggest differences are a lower GM% and a substantial decrease in the Fixed Cost base.
• Revenue was a bit lower than I was expecting - not a big deal considering it's still a large HoH increase.
• The cost reduction has meant that the EBITDA (ex. Asset write-down) is still in-line with my estimate
• There's a bit of share dilution that I missed
• Expecting it to now hit Positive Operating Cashflow in H2 FY2022
• I haven't forecast this, but there is potential for a Capital Raise in H2 FY2021 or H1 FY2022.(However, I think they can get by without it, unless there are any large growth initiatives)

What is an appropriate TTM Revenue Multiple?

The financial model uses a TTM Revenue I've found a built a comparative set from other ASX-listed Telehealth related businesses to inform this.
I have used a 20x Multiple as I'm not comfortable going higher, but as you can see, there are plenty trading at higher levels and the average for what I've called "Hyper-Growth" Telehealth businesses is 30x








As always DYOR and GLTAH