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Why IHR is a buy., page-114

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Letts920

2 Posts.

27/01/21

14:04

Post #: 50471567
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Originally posted by Brett M H: ↑

Rob certainly knows "his stuff" - and he clearly knows the IHR business back to front.

Will be interesting to see what the SP is - if they can achieve their "next stated ARR goals" of:

Triple - to $6m ARR

then Triple again - to $18m ARR

then Double - to $36m ARR

then Double again - to $72m ARR

All whilst maintaining strong controls over their costs - which have been steadily reducing over the past 6 months, but will no doubt increase a bit with the required extra sales staff in each new region.

Anyone care to take a stab at what the SP would be at each of those ARR levels?

Providing the rapid increases in ARR continue, and provided they keep there costs under strict control (which the business model is set up to do), my wild guess would be:

1. $6m ARR - $210m market cap (35 x ARR) - SP around 75 cents

2. $18m ARR - $495m market cap (27.5 x ARR) - SP around $1.75

3. $36m ARR - $810m market cap (22.5 x ARR) - SP around $2.90

4. $72m ARR - $1.26b market cap (17.5 x ARR) - SP around $4.50

Sounds pretty reasonable for a fast growing & profitable SaaS business - but others may have a better idea on the SP multiples this type of company could command?

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Rob certainly knows his stuff, I worked for him a few years ago and he knows the HR space extremely well

IHR Price at posting: 39.5¢ Sentiment: Hold Disclosure: Held
2 Upvote

0 Great analysis

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