So in light of todays announcement, I'm not sure the bleed will...

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euphoria

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06/06/24

11:17

Post #: 74191405
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Originally posted by euphoria: ↑

Sorry, must have missed this tag the other day.

Nothing fancy. But looking at EBITDA of 173M for a half or 346M for a full. Looking back to the lofty share price of $39, we were trading at a 31 multiple, which may have been justified if we were going to continue to grow at 50% annual rates. I am not sure how we got so far overvalued. Looking out with risks to immigration, I'm not applying much of a growth multiplier to IEL. For my comfort I want it about 12. (8.3% EBITDA yield, or about comparable to a risk free 6% in a mortgage offset). We are currently about 14.5 with a share price at $18.

This places it pretty well at about $15 a share, which looking at the technical side isn't unrealistic.

I understand IEL can grow Revenue by capturing increased market share, not solely on sector growth. Particularly when they do sneaky shit like this, that shows they grew 33%, while the Australian segment shrunk 17% in the last half, despite growing over calendar yr 23. Thats a large shock to the system in the last 6 months. Australia makes up over half their revenue and it shows growth in Canada, the UK, and the USA all down in the last 6 months. Market is correct to have caution.

For me, it's on a watchlist and ill check in time to time, but the sector itself needs to improve enough to justify a higher multiple, or IEL has to come down to be a bit more fairly priced. I'll also tack on, a stock being 'fairly priced' isnt always enough to get me excited. Particularly if the technicals look down right horrible and a high likelihood it becomes 'cheap'

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So in light of todays announcement, I'm not sure the bleed will stop at $14. Not sure a revisit of the covid lows can be ruled out.

I still think this is a solid business, that is going through a tricky period. Will want to see some stabilisation both technically and politically before dipping in.

IEL Price at posting: $14.92 Sentiment: Sell Disclosure: Not Held
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