Cosol Limited

ASX:COS

Cosol Limited

ASX:COS
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$0.870 (+2.4%)
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#300
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2
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Forum Topics COS COS ASX Announcements

Pinned straw:
acarbone1
Added 12 months ago

Cosol (COS) today made a reasonably good announcement.

047a9cf1b5a7c4778a24cc6acc932ff2f38baf.jpeg

Cosol is a SAAS company specialising in Asset Management Software.

  • Major clients of this company include the likes of Rio Tinto, Glencore & Aurizon
  • Revenue has grown from 12mil in FY2020 to 75mil in FY2023
  • NPAT has grown from 1.5mil in FY2020 to 8mil in FY2023
  • Todays Market Cap is 146mil and as such has a trailing PE of 18.5


Assuming the half yearly guidance can be annualised and reaches the bottom line this company could have an FY24 NPAT 11.1mil and a forward PE of 13.2. I won’t speculate on the probability of that occurring, however in a world where most asx listed SAAS companies carry a PE in the range of 30-60 this company looks like it has value.

I am however finding it difficult to zero in on the TAM, and how sticky if at all this companies software actually is. I’d love to get peoples thoughts.
Scott
Added 9 months ago

Market Size

$3.3 billion industry in 2021, projected to grow 8.5% annually through 2028* 

From https://wcsecure.weblink.com.au/clients/cosol/headline.aspx?headlineid=61139814

4
RogueTrader
Added 12 months ago

I see COS were featured on 'The Call' recently. Claude Walker wasn't keen "Only a decent quality biz; wouldn’t be surprised to see growth slow from here." Rudi F "Too small; lobster pot!"

https://ausbiz.com.au/media/the-call-friday-1st-september?videoId=31404

9
Strawman
Added 12 months ago

Nice one @acarbone1 -- I've never really looked at Cosol before but I agree it looks interesting.

I've emailed the CEO to see if he'll come and present for us.

16
wtsimis
Added 12 months ago

Ticks many boxes overall and not expensive based on history and future runway for growth and profitability

  • Provides information technology services in Australia utilising proprietary software and services to deliver solutions for clients operating in asset-intensive industries with a focus on resource and capital-intensive enterprise asset management and infrastructure-focused systems. 
  • High inside ownership. Tope 7 of shareholders own 45% business
  • Revenue growth well over 40% pus past 4 yrs including acquisition
  • Profitable with net p=margins 10% plus past 4years
  • EPS growth 20% plus past 4yrs
  • ROE 15% plus
  • Stocky customer base
  • Runway looks positive
  • 3% FF dividend


Entered a position in RL 1% , not on SM

12
edgescape
Added 12 months ago

@acarbone1 @Strawman

I don't think Cosol isn't strictly a full Saas company.

They are more like a managed services provider similar to Data#3.

Cosol is different in they have some generic solutions that add value to customer's Enterprise Asset Management systems.

So the theory is that being generic, their solutions can be deployed rapidly at perhaps lower cost?

But the negative is also the limited moat specialising in Enterprise Asset Management.

Another negative is the EBITDA margin is fairly static as the forecast margin is the same from previous periods.

You can see my previous straws which explain what I found as it feels like some may have missed some of my posts

Also the earnouts on AssetOn would be worth paying attention to as that could drag the final results.

Not trying to sound negative and I hope I am wrong. And I know no one respect my opinion anyway!

Having said that I do think it is good to get a meeting to clear up any misconceptions so that gets my vote.

15
acarbone1
Added 12 months ago

@edgescape your right I have missed the mark, I didn’t realise the size of there services component. That said there growth to date and there December 2023 forecast still look good to me.

7
edgescape
Added 12 months ago

Should be fine as long as they keep getting renewals and they can find some contracts. But I'm a bit wary of them going to the US.

The only Saas products that have potentially sticky ARR is AssetOn. The other Saas solutions are more leaning towards integration and migration so there may little or none ARR in that case as they could be for one-off use cases.. But more research will be needed to validate what I said.

9