One I bought at a $1.20 two months ago and wish I had held and built a bigger position - now up close to 100%! Clear turnaround in what should be a high quality business. Still some risks but appear to be executing.

Shaw and Partenrs - Gentrack Group (GTK)

Rating: Buy | Risk: High | Price Target: $4.50. A high-quality growth stock on a sub 10x EBITDA multiple. Reiterate Buy.

Event: GTK has delivered an impressive FY22 result. While the beat and FY23/24 raise was welcome, what really caught Shaw’s attention, was management see double-digit growth persisting through FY27. This firmly positions GTK as a growth stock. Management have shown their hand, investors can now either view these forecasts as fanciful or start pricing the stock appropriately. With GTK trading on just 9x FY24 Cash EBITDA Shaw’s believe a massive re-rate is coming. Shaw’s increase their PT to $4.50 (was $2.90) and believe a multiple of 23x is more reasonable for GTK’s growth and margin profile. GTK is a top pick. Reiterate Buy.

Recommendation: Shaw’s reiterate their Buy rating and increase their PT to $4.50 (was $2.90). The key driver of their upgrade is higher medium-term cashflows. On Shaw’s forecasts, which are now in-line with guidance, GTK is trading on 9x FY24 Cash EBITDA multiple. Shaw’s PT implies 23x which Shaw’s believe is reasonable for GTK’s growth and margin profile through FY27.