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prowiz

7,710 Posts.

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11/11/17

00:05

Post #: 28698132
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Originally posted by The_Oracle ↑

Dungiven, Apologies for the time frame in replying in relation to multiples.
Like all stocks, what was posted 6 months ago may not hold true today.
Back then, the multiple quoted in my post relied on securing recurring revenue and MABR sales occurring.
Since then:
1. Not one Raas contract
2. A downgrade on CY17 revenue (and don't say CY18 will be stronger), a downgrade = de-rate
3. Immaterial MABR sales to date and much more was promised to have occurred by now.

2.5x revenue only applies if they have recurring revenue and MABR sales, both which are immaterial at this point in time. The independent experts report at the time of the merger indicated that the revenue multiple for RWL was low (DYOR).
The stock is down ~33% in 6 months - regardless of potential, the share price is what it is and cannot be argued against. IMO it has promised a lot and has not delivered to expectations, plus it did a placement when it said it was fully funded. I know it is a well regarded fund, however they broke a promise, which is not well received in the market.
On top of this, the cash burn looks very large. The 4C quotes next quarters budgeted cash outflows, which appears to be ~US$14m for 4Q. Annualise this and the cost base could be as high as US$56m pa. US$22m in 4Q cash receipts at say 20% GP margin is hardly likely to cover costs and the company needs huge growth in sales to break even.
This stock has a high market cap given it is loss making. It could really deliver, but what is the downside if it underwhelms vs. securing the promised market share in China? If it does deliver, a lot is already factored in.
Whilst I am a fan of their tech, having good tech does not make a company successful.
Perhaps mgmt should spend more time running the business than doing another roadshow. Run the business, deliver the contracts and the share price will look after itself.

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Your comment should read this stock had a high market cap.... Not this stock has a high market cap....

All your reasons stated are why we are here, why we are valued at around $250m... I have seen a lot of garbage out there with much higher market caps on virtually nothing revenue wise. So your arguments are outdated and irrelevant at this very point in time....

Do you work for henslow mate? Because you sound awfully familiar...

Last edited by prowiz: 11/11/17

FLC Price at posting: 63.0¢ Sentiment: Buy Disclosure: Held
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(20min delay)
Last 7.8¢		Change -0.003(3.70%)		Mkt cap ! $84.31M

Open	High	Low	Value	Volume
8.1¢	8.1¢	7.7¢	$1.51K	19.43K

Buyers (Bids)

No.	Vol.	Price($)
1	6750	7.5¢

Sellers (Offers)

Price($)	Vol.	No.
8.0¢	104	1

View Market Depth

No.	Vol.	Price($)
1	6750	0.075
1	6756	0.074
1	20000	0.072
1	100000	0.070
1	52000	0.067

Price($)	Vol.	No.
0.080	104	1
0.081	80133	2
0.082	70000	2
0.085	139000	3
0.091	77370	1

Last trade - 15.48pm 13/11/2024 (20 minute delay)

FLC (ASX) Chart

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