EV / rev multiples It's all in the EV/rev multiple that an analysts wants to assign that results in the big spread in target prices. By looking at the product mix (ie. hydrogen vs. Cleantech / Industrial sales&Service) one could come up with a blended EV/rev multiple. XBC is getting the conservative multiple on all counts.
One could easily come up with their own target by looking at the charts. An upper trend line was violated (April to early December) when the foray into hydrogen (and financing) was announced. The upward trend has accelerated. The chart is telling you that we have expanding multiples for XBC now through the transformative acqusitions of both HyGear and Inmatec. This is what we expect as we have always wanted a larger foot hold in the hydrogen space to garner the multiples that is awarded to the likes of Ballard, Plug, Fuel Cell, etc.
From RJ's report today;
Hiking price target to $12/share from $7. In light of the foregoing commentary, we have
increased our 2022E target multiple on XBC to 8.0x 2022 EV/sales from 4.5x previously. This results in a target price hike from $7.00 previously, to $12/share. We note our revised target multiple is still a sizable discount to the Clean tech peer group average at 17.9x and a premium to the Industrial gas peers at 4.3x due to XBC's superior growth and now, potential future growth in hydrogen. Accordingly, with 51% upside remaining to our revised target price, we maintain our Strong Buy rating.