Hi All
I know it’s been challenging last couple of weeks with the share price dropping over 25% since the 4c was released.
Like many others have mentioned I don’t believe there is anything wrong with the fundamentals, but as someone noted in another thread its the shares coming out of escrow that seem to be holding us back as I have noticed multiple large sell orders of 1m+ since Friday wiping out the buy orders.
I know there has been lot of focus here on the revenue numbers but thought it would be also good to look at TNT’s EBITDA run rate to help us value the company.As you’d be aware, when TNT acquired each of these companies they also shared their respective EBITDA figures.
I have gone through each of their acquisition announcement over the past 2 years and below is what was reported for each company when the acquisition was announced to the market.
(TNT’s yearly revenue prior to going on an acquisition spree was $5m hence in the above table I am only factoring in revenue from acquisitions)
As per the above table and not taking into account any organic growth and synergies whether it be in the form of cost savings or cross selling opportunities, we currently should have an EBITDA over $20m.
However, If we ignore the recent acquisition of Loop Secure, and if we add up the reported revenue of all the other companies as reported at the time of their acquisition if we had no organic growth our current yearly revenue would be circa $120m.Noting as of the last quarter our revenue run rate was $180m, that to me indicates exceptional organic growth of around 50% during this period. I know the June quarter will always be a stand out so it may be more reasonable to expect organic growth of around 30% which I would be personally happy with.
Considering the organic growth and the recent Loop secure acquisition which added an addition 2.25m to our EBITDA, I wouldn't be surprised if our current EBITDA run rate is $25m+ which would mean we are trading at a PE ratio of under 10 with a market cap of $250m - which is quite cheap for a growth stock.
Just my 2 cents, would welcome any constructive criticism.
Not financial advice so please DYOR.
