RE:QTRH growthwanttoknowwhy, while there is excellent revenue visibility for 2024 QTRH needs to secure new business in the tolling space while they develop the supply corridor and other higher margin opportunities.
On the Q4 call, revenue visibility was addressed this way: - The sector has growth potetnial of 20%+. I take that to infer that the QTRH revenue target for 2024 is prior year +20%. That makes my target C$233M. Analysts' average estimate is C$209M, +7.7%.
- ~70% of the target is sourced from the backlog (value = C$702M at 12-31-23). This would be ~C$163M on my estimate.
- 15% to 20% of revenue is sourced from contracts that require annual renewal. This would be C$35M to C$47M on my estimate.
That leaves 10% to 15% to be sourced from new business or C$23M to $C$35M
There have been two revenue announcements todate:
- Tennessee weigh in motion: C$6.3M
- Red Fox accretive revenue: est. <C$5.0M
This revenue landscape is why I'm not stressed, but some news would be helpful to the market in general, and especially for those with some anxiety. A buffer, leading to over-peformance would likely lead to analyst upgrades and therefore would be very nice indeed. Of note, the average analysts' esitmate on revenue for 2024 is C$209M, an increase of only 7.7%, leaving even more room for ungrades with positive performance on top and bottom lines.
The bigger issue remains margins, where sequential quarterly improvement is needed on the road to QTRH's 20%+ EBITDA goal in 2025-2026.