Its time for change and its on finally on the way, page-47

Comparables

This is a surface level look at a few of DataDot Australian competitors. If you’re familiar with any of these company’s please let me know if I’ve missed anything. This list is not comprehensive; feel free to add additional competitors to this discussion.

ASX: YPB MC $15M

3x cap raises in past year & 5B (yes, that’s Billion) SOI

Revenue: $616,000; down by nearly ½ yoy and declining every year for past 5 years

Gross margin: 94% (I'm skeptical of this)

Loss: $11.2M

True free cash flow: -$3.6M

Valuation: P/S 24x, P/E n/a

https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02359556-6A1026911?access_token=83ff96335c2d45a094df02a206a39ff4

ASX: DTZ MC $135.5M

Revenue: $375,000

Gross margin: 29.5%

Loss: $3.65M

True free cash flow: -$2.5M

Valuation: P/S 361x, P/E n/a

https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02359494-3A564594?access_token=83ff96335c2d45a094df02a206a39ff4

ASX: SMX MC $52M

Revenue: $13,500

Gross margin: 23%

Loss: $6M

True free cash flow: -$4.5M

Valuation: P/S 3,851x, P/E n/a

https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02358511-3A564398?access_token=83ff96335c2d45a094df02a206a39ff4

ASX: DDT MC $7M

Revenue: $1,735,973

Gross margin: 55%

Profit: $513,000

True free cash flow: ~$1M*

Valuation: P/S 4x, P/E 14x

*Extrapolated from recent 4C

https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02345761-2A1282770?access_token=83ff96335c2d45a094df02a206a39ff4

I believe DataDot’s moat is their brand, but admittedly this is a weak moat at best. Regardless, it is in much better financial position, profitable & positive FCF, than its Australian competitors. It’s run by an aligned management team who have bought ~$750,000 shares on market approximately 2 years ago.

At a P/S of 4x and P/E of 14x and room for continued improvement in fundamentals, I believe DDT is a buy at its current price.