I prefer the old simple metrics - MC of $60m and EV of $40m ($16m+$4m tax rec).
(F/C are just theoretical unless paid out IMO).
To value DSK, it's about understanding normalised earnings.
The past couple of years are irrelevant as they were clearly over-earning.
On the other side because it listed during covid and most in the industry are males they've marked DSK down as a fad - they think gifting is dead and women don't want nice smelling items!
But actually in pre-Covid FY19 (the last normalised time) they were doing $9m NPAT from 100 stores and continually growing YoY.
They've now increased stores by 50%.
With a little bit of operating leverage that's a ballpark normalised $15m NPAT at current store count.
That gives current metrics of 4x P/E (with a third covered by cash).
On a 70% payout ratio that's 17.5% divi yield or 25% grossed up.
Incredible numbers.
Then add store growth on top.
So apply whatever multiple you want to normalised earnings.
I've said it before: Operating leverage + cyclicality + seasonality are a powerful cocktail.
The question is when is normal again?
FY24 will likely be tough. That will reinvigorate the bears further.
The only thing that matters is that they survive - which they will given cash backing and available facilities in the unlikely event of a strong downturn.
So it's more likely a FY25 play. It'll move before then as the market is forward looking. For now, best to switch off (nothing you can do).
The market is good on a 6-12 month time horizon but poor beyond that - that's the opportunity.
Throw in our new CEO and international expansion and that ups the multiple further.
Speaking of which, Vlad started today....
(20min delay)