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This is being driven by the high incremental gross margins inherent to any technology re-selling business gaining scale and thus benefitting from increasing rebates by suppliers. Comms Group generates a high-quality revenue stream, which is >95% recurring with a 36-month average contract duration and experiences less than $20m transaction values per month, and where comparable companies are being taken at headline transaction EBITDA multiples of >10x Ĥ) Significant operating margin expansion. My FY25e price target range of $0.27 - $0.34c (+170% to +250% returns over a three-year period, or 30% - 35% IRRs) is supported by assumptions combining:ġ) Durable secular industry tailwinds within a large and sustainably growing Total Addressable Market (“TAM”) which will drive annual organic revenue growth of >7% over the next four years.
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Au dynamic range expander for amadeus pro full#
On my FY23e forecasts (I use FY23 given this is the next full financial year), the current share price presents an opportunity to enter a potential “lollapalooza” investment case at an equity free cashflow yield of 15.5%, PE of 6.5x and EV / EBITDA of 5.2x for a business that I believe can grow EPS at >30% annually over the next three years, with a relatively asymmetric risk profile. Comms Group (CCG AX), an Australian-based IT Services nano-cap, certainly looks cheap at a share price of $0.10.