Get a handle on the correct analysis before posting. Ebitda is ‘gross’ earnings before, amongst other items, interest paid on debt. 2 companies could have the same ebitda at $500m for example but one have $2b of debt with very significant annual interest repayments due (and the considerable risk of a large debt burden to be repaid), whilst the other may have no net debt. All other things being equal they will and should be valued very differently on the market (market cap). For a comparable analysis net debt needs to be factored in (i.e added to market cap to arrive at Enterprise Value).
Again, to be clear, on current forecasts from the company of $350m ebitda, the EV/Ebitda ratio is not too much over 3x. In my view it should be closer to 5x because i dont think the market is adequately pricing in the BVOD business which is transformational for SWM. So, i happen to believe the stock will drift back up over 70c. Make your own mind up what it is worth, but start with an understanding of the metrics being quoted on this forum.
SWM Price at posting:
48.5¢ Sentiment: Buy Disclosure: Held
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