GREY:XEBEQ - Post by User
Post by
tamaracktopon Jun 16, 2022 12:47pm
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Post# 34761749
Absolutely nobody wants to hear the bull case
Absolutely nobody wants to hear the bull case100% typical near market lows
Remember the Scotia analyst's bull-case one-year target, quite coincidentally published when the stock was at 78 cents? Bull Case (C$4.50)
Our high case assumes $75 million of M&A per year through 2026E, along with higher levels of gross margins, revenues, and revenue backlogs relative to the base case.
- Gross margins: Systems – increase of 150 bp in 2023E and 250 bp in 2024E from 22.5% in 2022E and flat thereafter. Support – recurring 42.5%.
- Revenue: Systems – growing at 11% per year from $111 million in 2023E. Support – growing to $105 million and $125 million in 2022E and 2023E, respectively, and 42.5% thereafter.
- Revenue backlog: Systems – growing at 15% per year. Support – growing at 40% per year.
Our target price under this scenario equates to a 21.6x 2024E EV/EBITDA valuation.
What if he's right??