RE:RE:RE:RE:RE:RE:Let's see if this works. Trying to post the results:As long as the company achieves profitability I'm not overly worried about the balance sheet. Taking a deeper dive on the balance sheet: Like many peers THNK has a pre-paid services model, meaning customers pay before the services are rendered, and that constitutes the deferred revenue portion of liabilites. That line item will always exist and grow as the firm does. The fact that they have capitilized leases as opposed to operating ones is also not concerning nor out of the ordinay. Most of the acquisition consideration is in shares, not cash so from a financial health standpoint its not a concern. However having a low share price means paying for those considerations will be more dilutive to shareholders than what management expected at the time of the deals (this is my biggest gripe with the company but even at current share prices it'll be fine, but it will mean that the share price upside many expected during the IPO will take longer to achieve).
Looking at some of the credit metrics the company's leverage ratio is about 4.2x Adj. EBITDA at the close of the year. It's not a small amount but it's certainly not off market for an acquisitive company. If you assume Think exits the year at a $90mm rev and $7mm EBITDA run-rate with 48% gross margins and 15% top-line growth (low end of their expectations) then that debt number sinks to 2.7x by end of 2023. On an EV/S basis Think is currently trading at 0.7x 2023 (vs. 2.0x to 3.0x comparable average) and EV/EBITDA of 6.3x for 2023 (about half of comparables). That EV/EBITDA is a bit missleading given the operating leverage in the business so one has to look at that EBITDA growth which given the business model should be significantly higher than revenue growth particularly as the company enters 2023 and beyond..