Post by
dt_core on May 01, 2023 11:10am
Very positive outlook
While the quarter came in a bit below th emid range of management's guidance the notable pipeline of future similar SaaS wins alongside the $8M per year already announced is fantastically positive. Also the fact that management said they don't need to raise more capital is also positive, though I'm sure some additional shares will be issued to meet contigent libabilites though it's likely to be a mix of cash and stock. Dilution as a result of poor balance sheet management had been a big driver for poor share price performance in 2022 and YTD 2023. Still, even if one were to assume 100% conversion of the $13M Beedie line into stock + contigent libabilites converted ($4.7M in total) + options/warrants/RSU/other then the total amount of FD shares for THNK is 117.7M. Yes that's a lot, however if you take Q4 exiting Adj.EBITDA and add $3M more for the new contract (it'll be higher longer term). then suddenly the company has $9M in EBITDA and $94M in revenue at the current run-rate (that's not including any other future wins management spoke of). Enterprise Value of the company today is around $72.7M so THNK is still trading at a very steep discount. It would seem that $1.00 to $1.20 is a fair target price for the business today and 12 months from now $1.50 to $1.70 if you assume a reasonable number of the SaaS pipeline converts. Of course based on the comments I heard today I'm expecting Q1 to be on the weaker side while Q3 and Q4 will be on the stronger side simply due to seasonality in the business and the natural ramp of new business wins. Overall all though very positive for those planning to hold the name for a few years or longer.
Comment by
prophetoffactz on May 02, 2023 2:56pm
The pipeline sounds quite impressive in the conference call.