I think its valued closer to a consulting based business atm...

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Kevc0322

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01/12/21

19:38

Post #: 58004832
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Originally posted by dbd25: ↑

I'm finding it hard to predict what would be a fair valuation for TNT at the moment, even using all the regular methodologies. I just did a quick update on how TNT compares with other ASX listed cyber related stocks, and it does seem to be at a low valuation for the sector. I've used the market cap/revenue ratio (almost the same as EV/sales) simply because many of these stocks are not yet cash flow positive (so P/E can't be used). The cyber security sector average is MC/rev ~ 5.5.

MC/rev
FZO.....40
WHK....17
AR9......11
NXL......4.1
TNT......2.3

I guess we'd all be very happy if TNT could trade at the next lowest MC/rev = 4.1 (SP would rise to ~29c). On the other hand, you get a stock like ST1 (telecom provider with cyber security arm) that currently has an MC/rev = 1.4. ST1 had revenue and EBITDA for FY21 of $104m and $11.5m, which were higher than TNT, but ST1 has a lower MC of $151m (so MC/rev ~1.4). ST1 is even more undervalued than TNT.

All IMHO, DYOR

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I think its valued closer to a consulting based business atm which is around the 1.5-2 mc/rev ratio on average. Its fair i guess given most of the rev derived is based on consulting work which has pretty tight margins and not easily scalable. I think we also need a bit of clarity on the organic growth which should be visible in the next quarterly. My 2c... dyor

TNT Price at posting: 16.5¢ Sentiment: Hold Disclosure: Held
2 Upvote

0 Great analysis

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I think its valued closer to a consulting based business atm...

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