I have included the RAAS research report on KYP where they upgrade their target price from 25c to 30c.
Some of the highlights are
1. Strong FY24 Financial Performance: Kinatico delivered a 24% increase in underlying EBITDA to $3.9 million, surpassing forecasts. SaaS revenue grew by 90%, contributing significantly to an increase in the EBITDA margin to 13.5%, up from 11.2% in FY23.
2. SaaS Revenue Growth: SaaS revenue, which now accounts for 34% of Kinatico's total revenue, saw a substantial increase. This shift from one-time transactional revenue to recurring SaaS revenue is a key factor in the company's improved operating margins.
3. DCF Valuation Upgrade: The report upgraded Kinatico's DCF valuation to $0.30 per share, up from $0.25 per share, based on improved profitability and free cash flow. The valuation reflects a reduction in the WACC to 13.2% from 14.4%.
4. Operational Efficiency: Operating cash flow increased by 15% to $4.2 million, and free cash flow improved to $1.0 million, reflecting better cost management and increased profitability. This is a significant improvement from the previous year's negative free cash flow of $0.3 million.
5. Positive Outlook for FY25: The company has adjusted its forecasts for FY25, anticipating continued revenue growth and improved profitability. The underlying EBITDA forecast for FY25 has been raised by 5% to $4.0 million, with new revenue and cost management strategies factored in the report.
Any read through from other investors?
KYP Price at posting:
10.0¢ Sentiment: Buy Disclosure: Held
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