Gentrack Group Limited

ASX:GTK

Gentrack Group Limited

ASX:GTK
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$9.23 (-0.9%)
Last close price
#357
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1
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Reports (2) My Report Forum Investors
Forum Topics GTK GTK Turnaround?

Pinned straw:
Mujo
Last edited 2 years ago

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.
thunderhead
a month ago

Same story here. Bought at those prices, didn't build up a meaningful/sizable position, and sold too early.

It appears more than fully priced though, especially compared to its peer on the exchange, Hansen.

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Mujo
a month ago

Well this is one i definitely regret selling now in hindsight, up 800% in a year after a further upgrade to earnings today.

9
edgescape
a month ago

@Mujo , @thunderhead Yes it is expensive.

Clearly lots of people thought they would not beat the estimates after last year.Priced for perfection and hence the decline on Friday.

Was going to add some more on Friday to my initial holding but I had to factor in the scenario that they won't beat the estimates. Added to the fact there was the CFO selling. Not to mention buying so close to the earnings release.

Also need to account for the fact that ERP/CRM systems are difficult to customise with all the changes in the energy regulations. Once you go down a path on development it is hard to go back and make it better..

So GTK is currently riding this tailwind but the question is how long will this last?

Good to see after a bit of my own research (without referring to any of the other small cap fundie commentary) I got this one right.

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