Pinned straw:
Gaurav Sodhi from Intelligent Investor has just released their update on AD8
In short - Key Points
- Strong FY24 result expected
- Shocking guidance for FY25
- Business is more cyclical than expected
The writeup doesn't really reveal anything that hasn't come up in discussion here
Gaurav's conclusion ...
The long-term story hasn't changed at Audinate. In fact, with software sales accelerating, a transition from hardware sales to software will strengthen the business and expand the moat
After the big fall, Audinate's market capitalisation is $700m, and it has over $100m in net cash. This year's pre-tax profit is likely to be about $10m, which still sounds savagely expensive, but this is a dominant business that could win the entire industry profit pool
Over time, we still expect Audinate to generate over $1bn in revenue at 20% net margins. That path, however, has gotten a little riskier
With the full-year result due in a fortnight, we think acting cautiously, rather than cavalier, is the right response. We're removing price guides for now and sticking to HOLD. We'll revisit the stock after it reports full-year numbers
Wow. Brutal drop, though it has retraced from the ridiculous $6.50 low.
Certainly not a good read through for growthy small companies heading into reporting season.
All that insider selling ahead of a CR turned out to be a flag after all.
Glad I always wait to see the first 1/2 wave turnaround before getting in. Oh and guess where it dropped too, the 76.4% retrace from the time it was listed on the Markets (love Fib"s). Wow
