Looks like the IPO managers managed to offload Nuix at an incredible price relative to its absolute value.
Underlying company looks good to me, but as Warren Buffet says: Price is what you pay, value is what you get.
It looks like subscribers certainly paid a very premium price relative to the value of the business.
Based on management's revised FY21 forecasts:
Underlying growth has slowed right down to 10-15%, yet the underlying business is being sold at:
*a revenue multiple of 7 times
*EBITDA multiple of 20 times
* Adjusted Net Profit multiple of 62 times.
All these metrics seem too high relative to potential growth of 10-15% p.a
Either FY22 has to prove that growth rates can be sped up, or else I think the share price will continue to trend down until the share price approaches the underlying value of the company.
Absolute lemon, because IPO share holders where sold a decent company but at such a premium that their capital wealth will be inhibited for many years to come due to the price paid.
One for the watchlists.
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