Catapult Group International Ltd

ASX:CAT

Catapult Group International Ltd

ASX:CAT
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$3.37 (-1.2%)
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Reports (13) My Report Forum Investors
Forum Topics CAT CAT CAT valuation

Pinned valuation:
BoredSaint
Added 4 weeks ago
Justification

Update 26/11/24

Updating based on 1H25 results.

If we forecast out 5 years and assume a 15% CAGR for revenue, in FY29 we will hit revenue of around $200m USD.

CAT have a long term target of 30% profit margins. This is based on "Management EBITDA" which excludes share based payments. I'm going to assume this will translate to around 15% NPAT margin which would give FY29 NPAT of around $30m USD.

Assuming a PE of 30x and and an increase in SOI to around 300m shares gives an FY29 share price of around $4.28 (assuming a USD:AUD exchange rate of around 70c). Discounting this back would give a valuation of around $2.92.

Obviously lots of assumptions here and looking quite a fair way out but just gives a rough estimate into what CAT needs to achieve at around the current share price.

I think if it pulled back to around $2.50 I'd be looking to buy more shares but am already holding quite a full allocation after the current run up.

Disc: Held IRL and on Strawman.

Original Valuation

Just running some very rough numbers to see what figures I get.

Assuming 10% CAGR revenue growth for the next 5 years:

  • FY28 Revenue of around $135m (USD)

Assuming Net Margins of around 10%:

  • NPAT of around $13.5m USD, converted back to AUD around $20m

SOI of around 300m accounting for some share based payments to employees gives EPS of around $0.067 per share.

Assuming a PE of 25x in FY28 and discounting back 10% per annum gives a share price of around $1.05.

Probably more of a calculation of what assumptions need to be made for the current share price (around $1.00) to give you a decent return.

Disc: Held IRL and on Strawman.
Strawman
Added 4 weeks ago

I've still yet to update my valuation @BoredSaint -- but I would've taken the same approach, and cant find much fault with the assumptions you've used (which are far from aggressive).

I agree with the conclusion, shares perhaps a little north of 'fair', but certainly not silly. I'm not planning on selling anytime soon, but may do a little adjustment if I need to free up some cash for other things.

18
BoredSaint
Added 4 weeks ago

Thanks @Strawman

I would say my assumptions are more on the conservative side and can certainly see why people see the current share price as fair value. Probably more just my investing style after being "burnt" on a few other companies that were priced to perfection.

I did sell some shares a few months ago to as it was becoming quite a heavy weighting in the portfolio but given there is such a long way to go with the thesis I am more inclined to hold the remainder or add on weakness.

15
Strawman
Added 4 weeks ago

I usually find it better to err on the conservative side too @BoredSaint, margin of safety and all that.

For low growth, mature companies, you can be more precise and fussy with valuations (eg. we'll all have a different view on, say, Woolies, but no one is going to suggest they can grow at 10%pa for any extended period). But for companies that are growing fast, have a long runway, are industry leaders (in an industry itself that is fast growing) and decent competitive advantages -- well, you don't want to be too clever with your valuations. Take it from someone who was arguing ProMedicus was expensive at $150!


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