New predictions, page-52

At our current share price the past AFR media speculation about a takeover might not be that far-fetched. Trading under 2.5x psr on both constant currency and reported currency basis. That's cheap for a company approaching $75m arr.

Rather interesting that the Evans and Partners research @alpha100 has shared flags concerns with management. Karl is always very bullish on investor calls. He talks up growing LTV and high customer retention. He is a blue sky thinker when it comes to current market penetration (not more than 5%). He has often drawn comparisons to Atlassian and their path/trajectory. In January, Karl flagged two potential large customer wins. We've had one of them and the other is hopefully still to come. There was a large increase in their customer team (43% increase) at the end of 2020 and Karl said it reflected the increase in request for tenders and proposals they are seeing (claimed up 10x).

Despite all of this, the company hasn't been able to back up the talk with the hard hitting numbers. This has had a hit on investor sentiment. "One-off" legal fees don't help either Karl. It's a lesson for Karl in not over promising. The best CEOs know how to balance this and I'm not sure Karl does. My target is $75m constant currency basis ARR with Q1 FY22 results reported in October. Applying a very conservative 3.5x psr we reach a valuation of $262.5m MC (~29c SP). From current share price there is obviously some good upside potential over the next 6 months.