RE:Updated estimates of FY2022 financescolourama wrote: Now that two quarters of FY2022 are in the books, I thought it would be interesting to see (in a simple way since I am not a financial expert), some basic estimates for the year, to get a hold where we are.
Revenue: So far PHA has $36 million in top line revenue through 2 quarters. Add in 1.75 quarters for the new acquisition, estimated at $24/4 = $6 million per quarter, and assume that the next two quarters give us the same $17 million each for the current business. This gives $36 + 2*$17 + 1.75*$6 = $80 million in top line revenue. So at our current market cap, we are trading at $26.8/$80 = 0.34 times sales.
EBITDA: So far PHA has $1.95 million in EBITDA. Take the most recent quarter as a bearish conservative estimate and add back the non-recurring expenses:
- $0.3 million for the implementation of a new ERP system and computer expenses
- $0.3 million for transaction costs related to their acquisition
I get say conservatively $1 million in EBITDA. The new acquisition adds approximately $3 million EBITDA per year, so $0.75 EBITDA per quarter, say. So a conservative estimate is $1.95 + 2*$1 + 1.75*$0.75 = $5.3 million EBITDA for the full year. At current market cap we are trading at $26.8/$5.3 = 5 times EBITDA.
If they return to their usual $1.5 million in EBITDA per quarter, then the business is seeing 4*$1.5 + $3 = $9 million in EBITDA and we are trading at under 3 times EBITDA.
Of course there are other perhaps better metrics that one should use to value the company and I welcome any corrections. But is the negativity on the company just market sentiment? It feels like everyone is pricing it as if the company is a failure.
Very frustrating, but I'll continue to pick up a few shares and check back in August to see if I am the fool for viewing the company more positively.
Hi Colourama. It's nice to see a financial forecast for the year.
Year to date we get ~ $36m or the equivalent of $18m per quarter.
R~ $36m + $18m*2 + $6m*1.75 =$82.5m
Or, if we use second quarter as a lower bound for the next 2 quarters we get
R~ $36m + $17.5*2 + $6m*1.75 = $81.5m
It is not clear if costs related to Erp will continue for the next 2 quarters, then go live on Oct 1, and then stop recurring.
As a lower bound ebitda should exceed $700k and can be as high as $1.3m over the next 2 quarters. This comes from $300k in transaction costs, $300k in Erp costs and $300k from lower revenue contribution from Code Bleu and Premier Soin. I will use $1m as a mean estimate which agrees with your estimation for the next 2 quarters.
Also, the acquisition adds $3.4 million of recurring ebitda. Or the equivalent of about $0.85m per quarter.
ebitda ~ $1.95m + $1m*2 + $0.85m*1.75 = $5.4375m
Enterprise value =~ $26.8m + $5.73m + $14.5m =~ $47.03m
Enterprise value to ebitda for fiscal 2022 is approximately 8.64.
it is much better to look at enterprise value to ebitda metrics for a full 4 quarters post acquisition.
ebitda=~ $1m*4 + $3.4m =~ $7.4m
If we add back $0.3m in ebitda from lower revenue contribution from Premier Soin and Code Bleu then we get
Ebitda =~ $1.3m*4 + $3.4m =~ $8.6m
Estimated forward enterprise value to ebitda would range from $47.03/$7.4 =~ 6.35 on the lower end of ebitda and $47.03/$8.6 =~ 5.47 on the higher end of ebitda.
My guess would be that a fair value is anywhere between 10-14 times Ebitda and possibly even higher given its growth rate.