Market Comparison

It's always good to look at similar businesses and see how they stack up against each other.

I've posted comparison observations before, but often just on a snapshot of information.

Decided to look back and forward on where things might be heading.

Basic summaries below which can now include the December 4C from each coy.

I used to include RAP as market cap was similar (revenues were not!), but they got bought out.

M7T - announced a 10 year $16.7M contract in January (share price rises 30%)
MDR - published a record December quarter $41M (share price rises 10%)
ALC - they state late payments to arrive in the March quarter (share price steady)



This was done over a few beers this weekend with many tabs open and my iPhone calculator.

I think it's mostly accurate and encourage challengers and suggestions of comparison orgs.

All numbers come from the 4C statements and not the wordy summaries.

Data was from the last 2 years, with Excel doing the work with bar charts and trend lines.

RECEIPTS

MDR had a monster December quarter ($41M) which skews their trend line. But even with a $30M or $25M quarter, MDR is still seen to be trending up with receipts. Both M7T and ALC are flat over the last 2 years with a slight downtrend. ALC struggling to reach $15M quarters and M7T never reaching $10M.



COSTS

All are trending up with their costs over the last 2 years. MDR have had two big quarters above $20M. If they can keep costs under $20M but closer to $15M per quarter, the trend line should start to deviate down. Of course the same could be said for the others as well.



Cash

MDR and M7T trending up. ALC trending down. The dotted bar above MDRs last quarter is their debt (~$15M) which I have subtracted. M7T hold $20.6M, MDR $17.7M after removing debt obligations. MDR's (blue) cash is observed to be trending up over the last 3 quarters. M7T topped at $25M and is on the way down.



ALC
ALC will get a bump in receipts in March from some late December payments, but their cash balance is in decline. If cash is observed to be under $15M after March this will reinforce the cash decline. Their costs also appear to be rising slightly higher via the trend line than both M7T and MDR. I believe ALC is over valued at $190M MC and Silverlink needs to deliver this calendar year. A lot of loose shares with only 50% being held by the Top 20.

M7T
These guys had a troubling Q1FY23 with only $2.64M in receipts. They have only been beaten their Q3FY21 revenue ($8.35M) twice over the next seven quarters. Receipts in decline, costs rising but a good recent win with a (meagre) long term contract. M7T are rolling in cash but with the MDR's recent quarter, cash is close to parity with M7T. M7T's last 3 quarter cash has been trending down, MDR last 3 quarters, cash has been trending up.

MDR
Management need to show December receipts wasn't an outlier. They have taken a loss making, neglected business in Adheris, to an operation that has just earned in a single quarter close to its enterprise value when it was acquired in November 2020. Costs are higher than both M7T and ALC, with M7T running the lowest.

Is MDR share price contained because of their lumpy revenues? Receipts are trending higher than M7T and ALC.

Is MDR share price punished because their cost base is higher? All three show similar burn rates.

Is MDR share price disciplined because of their debt? The cash chart removes their debt and still shows cash trending up.

The December quarter was telling and showed MDR is on the way up; more receipts, more cash with costs down. March will be very interesting. With Regal now under 5% and appearing to sell down, now would be the time to sit below the bids and wait. $20M+ revenue for March isn't out of the question. Couple that with a cost base at $15M would increase cash and be inline with M7T trajectory.

Both ALC and MDR rotated their CFO's over the last few years.
MDR replaced Read with Ratliff as CEO.
ALC looks to be in trouble, despite suggestions March will see a bump in revenues.

My (biased) opinion sees MDR in FY24 better positioned than M7T and ALC, but we need to see what lands in the March and June quarters.