Interesting to look at the share price since listing (at the end...

Interesting to look at the share price since listing (at the end of 2021) :
- first regular decrease from around 2.25 $ to a low at around 1.34 $,
- since then, regular rebound with a share price back to 2.25 $.

Main explanations for the first phase (regular decrease) :
- large impact of covid on their business,
- regular decrease of the margin.
Probably useful to remind that Shape was created 34 years ago and had a regular increase of its business, except for 2 periods (GFC and covid).
The company claims that it has a rather good visibility on its margin as it has short projects (3 to 6 months), which enable them to have a good visibility on costs when it is competing for new projects.

Main explanations for today's rebound :
- large rebound for its order book (+ 29 % according to H1 24),
- rebound of margin during H1 24, to be confirmed during H2 24.

Obviously, this stock has risks (rather low liquidity of the stock and still low margin), but the valuation still looks interesting with EV/EBITDA 23 of 4.7 x and EV/EBITDA 24 of 3.6 x (if FY 24 EBITDA increases like H1 24).
This business also requires a low level of Capex : in FY 24, Capex+ lease was only 4 m$ vs 19.4 m$ of EBITDA.
As a result, the company generates a high level of free cash flow : 19.5 m$ in FY 23 (21 % free cash flow yield).

Even if we remove the impact of the change in working capital, Shape generated 12 m$ of free cash flow in FY 23 (vs 5.1 m$ in FY 22), which represents 13 % free cash flow yield.
Still quite high for a company which increased its EBITDA by 31 % during H1 24 and can probably increase further its margin going forward (H1 24 EBITDA margin of 3 %).