12th of April 2024:

The following valuations are based on the assumption the cost base remains consistent YoY - I've made this assumption after SKS made the comment they would be able to hit their $120 million+ revenue target for FY2024 with a consistent cost base.

The Simple:

Notes:

• SKS is currently trading around a PE of 27 or so (slightly higher after the run over the last few days) - so I've assumed that if they were able to hit their $120 million target, the market would be willing to pay at a similar ratio.
• The bear case and uh oh, I've assumed a lower ratio, for obvious reasons.
• This is as simplistic as it gets, but as of late, I've found that simple is sometimes better - specially with faster growing small cap companies.

The DCF:

Forecasted out to FY2033.

Discount Rate = 10%

Terminal Growth Rate = 3%

Sensitivities = $0.36 through to $1.19

Valuation = $0.77

Notes:

• Over the last five (5) years, the cost base has been somewhat consistent, in line with what management are providing for the outlook in the coming year. This gives me some solace when forecasting out 10 years into the future.