RE:RE:Analyst lowered to "neutral" on FORAStrange that the stock would drop ~10% when an analyst moves from outperformer to neutral.
It's hard to believe VerticalScope market cap is only ~130M with 39M net debt (~170M EV) to June 30. It will easily finish 2024 with 20-30M FCF, probably around the midpoint. Thats less than 7x FCF yield and without Q3 results in yet (we are in Q4!).
Even if revenue growth slows a bit, they have another huge tailwind with debt servicing costs dramatically dropping (which eats up a lot of FCF). Interest rates are dropping, and they are slaying debt, reducing debt from 54M to 45M in the first 6 months of 2024. They could end 2024 with 35% less debt than what they started 2024 with. Unbelievable considering in 2024 they also bought back shares ATM while growing the cash pile over the same time.
If Q3 results and guidance are even halfway decent (the bar is so low now) this stock is going to fly because at these levels it just doesn't make sense. I can see why management is disappointed with the stock price and weighing the benefits of going private instead. I can’t say I’m upset buying at these levels!