Stealth Undervalued??

Hi All,
I have recently come across SGI & have taken a position given the business looks cheap on future prospects.
Management have guided that with a full year of C&L & Skippers integrated into the business they are looking to achieve $95+m in revenues & $5.7m in EBITDA (6% margin)

Management believe they are on track to deliver 200m revenue & 8% EBITDA margin by FY25. Based on this figure FY25 EBITDA would be $16m, putting today's valuation on a FWD EV/EBITDA of just 1.4x. SGI has been making private market acquisitions at 3-4x EBITDA. If we use this multiple on FY25 EBITDA the business would be fairly worth $48m or $0.48c/share assuming no further dilution. But of course this is if everything goes to plan which never happens in business & there is sure to be a hiccup between now & 2025. However if we conservatively assume that revenues grow at 10% from FY21-FY25 in-line with managements expectation this places FY25 revs of ~$93m.

Conservative Valuation:
FY25 revenues = $93m
8% EBITDA margin
FY25 EBITDA = $7.4m
3x EBITDA multiple = $22m MC
4yr IRR = 14%

Bullcase Valuation:
FY25 Revenues = $200m
8% EBITDA margin
FY25 EBITDA = $16m
3x EBITDA multiple = $48m MC
4yr IRR = 38%

I believe the acquisitions made are done so on very favorable terms for SGI essentially paying 1x book.

Once these subsidiaries are fully integrated & margins increase the business valuation should get a boost on FY22 earnings report.

Unless I'm missing something I can't see why this business is currently trading on such a cheap multiple compared to private acquisitions?

CEO owns 11% of the business so has skin in the game.

As always DYODD!!