Pulse Health Valuation

I’m interested in what others are forecasting for FY2017 for Pulse Health. FY2016 results will be ugly, but the FY2017 results should show the true potential of this business.

My personal calculation is below (please DYOR – I’m not a financial advisor).

EBITDA of $8.5 million from existing assets, (Management Forecast, give or take $0.5 million)
Plus: EBITDA of $4.8 million from acquired assets, (Management Forecast)
Plus: EBITDA of $0.0 million from Gold Coast Hospital, (Management Forecast)
Plus: EBITDA of $0.0 million from organic growth (Conservative Estimate)
Total EBITDA of $13.3 million.
Less: Depreciation of $2.2 million. (Estimate based on depreciation was $851k for the 1^st half of FY2016)
Less: Interest Expense of $1.5 million. ($30 million * 5%)
Less: Tax of $2.9 million. (30% of NBPT)
Total NPAT of $6.7 million.

Market Cap. Of $76 million.
PE of 11.3x

The Australia’s Healthcare Facilities’ industry’s PE is currently 27.2x.

The key risk is the Gold Coast Surgical Hospital which may underperform and be loss making for FY2017. On the flip side, I would hope that the other assets experience some organic growth given that the Healthcare industry is growing. So should offset each other.

So overall in my opinion, the stock is significantly undervalued to its peers and great value.