RE:RE:FLYHT Research Report Updated by KRC InsightsTo further substantiate a share price increase, less than a month ago KRC came out with an updated target price of $1.80. This reprise post contains highlights and a link to the full report.
CF105 wrote: Report highlights... (New target price: $1.80.)
On Sept 16, 2020 FLYHT announced Phase 1 of its Actionable Intelligence (AI) strategy. Using IBM Watson, FLYHT’s two launch partners are China Express Airlines and Swoop Airlines. Management is working on adding a third in the next few months.
FLYHT’s AI is a holistic approach enabling airlines to preemptively manage their operations with the goals of improving efficiencies, lowering costs and improving ontime operations. It is a unique solution based on a broader set of operational inputs vs other offerings.
FLYHT’s AI solution is expected to generate $120m in savings to airlines over 3 years when fully implemented (Phases 1-3). Phase 3 requires AFIRS hardware.
Q2/20 results were negatively impacted by the COVID19 induced slowdown as expected. Revenues declined 52% YoY, but cost reductions, last of the PWS subsidy and government subsidies resulted in positive EBITDA. FLYHT has access to additional, COVID-19 government support.
Given SaaS revenues are based on the number of flights, we expect these revenues will directionally follow the recovery in Revenue Passenger Kilometers (RPK). IATA forecasts that RPKs will rise 62% in 2021 over a depressed 2020. Also, FLYHT has 2 existing hardware contracts (working on others) which will be materially delivered in 2021E. This drives our +44.7% recovery in revenues for 2021E.
We account for the above factors in our sum-of-parts valuation. Maintaining the SaaS revenue multiple of 6.0x and 1x for the other revenue streams, we derive a target price of $1.80 ($3.30 previously).
Complete report here...
https://www.flyht.com/investors/why-invest/
Direct link (per PP) here...
https://www.flyht.com/_resources/pdf/Flyht-Research-Report-Updated-by-KRC-Insights.pdf