CL1 has been very disappointing - a long term holder - do I buy more at this price as some of the substantial holders have been doing recently or do I cut my losses and move on to something else?
I have attempted to model Class so I can compare and better analyse the FY21 results. More recently Class has not been very transparent on the revenue lines
Happy to hear from other people who have modelled Class
Class Super 176900 acc X ARPU of $223 = $39,448,700
- 175630 accounts in Dec20
- Have increased ARPU from $216 Dec20 to $223
Class Portfolio 9700 acc X APRU of $130 = $1,261,000
Class Engine $150,000
Class Trust 6000 acc X ARPU of $200 = $1,200,000
- Some big assumptions here and I think this is the segment that really needs to fire for Class to re-rate
- June20 acc were 1683, Dec20 acc 2571, the product has really only just been launched and the revenue is still very small but potentially could grow as large as Class Super
NowInfinityFees $7,494,960
- Based on the 4 months of disclosed trading in the June20 Accounts plus 10%
- Could not find any info in Dec20 accounts
Doc Sales $314,000
Smartcorp $2,100,000
- Based on the 4 months of trading shown in Dec20 accounts
Reckon Docs $1,000,000
- Based on presentation at time of acquisition
Other revenue $22
Model has revenue of $53,270,000 vs Company forecast revenue of $54,000,000
Model EBITDA of $21,348,064 vs Company forecast of $21,600,000 both are based on Company forecast of 40% EBITDA margin
The real complication with this is the amortisation of software R&D which has grown exponentially 1H19 - $4.4m, 2H19 - $4.6m, 1H20 - 5.5m, 2H20 - ????, 1H21 - $7.1m, forecast 2H21 - $11m) and is a total guess on my part.
Depreciation $1,000,000 educated guess
Amortisation $10,000,000 uneducated guess (Dec20 HY figure was $3,700,000)
Using Company EBITDA forecast then NPBT $10,600,000
30% tax rate
NPAT $7,420,000 (Dec20 NPAT was $3,779,000)
123,758,834 shares EPS 6.0cps
CL1 is really a low EPS growth story and a PE ratio of 20 is pretty generous which leads to share price of $1.20 unless
- Really ramp up Class Trust
- Get some cross selling happening with the purchases
- Get over the R&D hump - competition may prevent this from happening
Market Screener - all of the above was not done checking below - but pretty close - interesting the 3 analysts following the stock have an average target price of $2.38
Shows the destruction in shareholder wealth over the last couple of years
Cheers
