Post by
wanttoknowwhy on Jul 02, 2023 12:45pm
EBITDA multiple
"The company could be on track to generate $500 million in annual revenue by 2025, according to the team’s forecasts. By then, it also expects to hit an EBITDA (earnings before interest, taxes, depreciation, and amortization) margin of 15% and trade at a 15 times EBITDA multiple...
If these targets are met, Quarterhill could be worth $1.1 billion by 2025. Right now, the company is worth just $186 million. Put simply, there’s upside potential of roughly 600%."
https://www.fool.ca/2023/01/10/quarterhill-tsxqtrh-a-deeply-undervalued-tech-stock/
-how to generate $500m annual revenue by 2025? Need to sign more contracts (>$200m/yr) plus additional 5x or more initial contrats value work ETC has so far?
-what is average ebitda multiple for ETC industry? 15 multiple is reasonable for ETC with $500m annual revenue by 2025?
Comment by
wanttoknowwhy on Jul 02, 2023 2:26pm
ebitda multiple probably has no strong relation to growth, margin, size or so. Its more like an art not a scince as i see. But stability (more cash reserve), predictable and sustainable strong profitability and good management could be crucial factors for high multiple trade.. If QTRH can be managed this way, 15 multiple trading is not a preblem. We'll see.. good luck
Comment by
cabbieJBJ on Jul 02, 2023 4:45pm
2-3 major contract awards = $180M - $200M. That's the current target, but may be short this year with the focus on cost and completion of the 7 awards at the implementation stage. The Fool's margin assumptions are in line with QTRH guidance at the time of the ETC acquisition. So...we await signs on cost management and improved % complete. Early August.