Sangoma Technologies Corp T.STC

Confusion on Earnings

[retiredcf]

In addition to the lousy overall markets, this might explain why STC was unfairly punished last week. GLTA

Re: Your comment on STC

Sangoma Q2 revenue was $US54 million and not a miss but a beat. Also debt level does not seem high at all given the Adj. EBITDA coverage?

We are going to pin the blame here on Bloomberg, which showed (and still does) a miss. Net debt is $50M, which is 2X EBITDA but close to 4X cash flow and 5X free cash flow. 

From 5iResearch. 

[Torontojay]

Also worth pointing out that net debt is trading at ~ 1.2 times forward  looking ebitda. If we annualize the $10.4m in Q2 adjusted ebitda and compare that with $50.7m in net debt, then we arrive at ~ 1.2 times. Their cash flow coverage can very comfortably cover their interest expense.  Sangoma is a true gift at current prices.           

[Captain71]

I’m even more confused with the reporting, but I hope one of you can explain. They are reporting EPS fully diluted, using 31.7 million shares. The shares to be issued in accordance with the takeover of STS will be issued over the next 14 quarters. I was calculating shares outstanding at the end of fiscal 2022 at 21.8 million. Don’t know the reason for this. Was it just to make the loss look

[Torontojay]

If you look at the balance sheet at the year end financials you will see that all of the assets of Star2Star has been included and amalgamated with Sangoma. Also, if you look at the shareholders equity component you will see that shares to be issued is included in shareholders equity. It makes sense that if they're going to include 100% of the assets on the balance sheet, then you should

[Captain71]

Thanks Torontojay, that does make sense for sure. I’m not feeling too good about it though as many investors are estimating future Revenue/Ebita/Earnings all per share to calculate share price. This is evident in the massive share price decline we have seen since the last quarterly report using fully diluted shares. Unless management is expecting a rapid increase in all the above numbers we could

[MarkG1963]

I don't want to be a downer on this stock but I don't see much going forward for the remainder of this year. The financials were not that special. Chip shortage and risinf interest rates.More dilution coming. I am expecting a $12-13 zone to buy in the next few months. If not then there are planty of other stocks to invest in. I don't fall in love with my stocks. Maybe it will get back