Poor Gentrack, i havent checked in with it for a while but it's clearly not been doing well.
Shares are down ~80% since 2018, and EBITDA (operating profit) has dropped from $28m in FY18 to an expected $11m for the current FY20 (its financial year ends in September).
In today's ASX announcement, Gentrack said the second half was ahead of the first and that cash flow would be positive for the full year.
But they also said that increased costs and added competitive pressure would mean the revenue run rate for FY21 would be "well below" the H2 FY20 run rate, and that EBITDA would be closer to break even.
COVID is clearly having an impact and it seems industry conditions remain tough. There's a new CEO coming on board who will try and turn things around, but it looks like it could be a tough job.
Assuming around $100m in FY20 revenue, shares are on only 1.4 times that. Pretty cheap if they can revive margins. If not, and the top line remains stagnant, the current 12x EBITDA isn't cheap at all.
Until things can be shown to improve, it's an avoid for me. But I do think there's a good business here, just don't have a good handle on the competive landscape and direction of the major profit drivers at this point in time.