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#Bull Case
Added a week ago

Atomos provides digital imaging creation tools for video professionals

trade rationale:

1. very rough comparison pre-COVID where share price reached 1.5 versus current level at ~1

2. in Feb the company posted strongest half year result in company history with sales, EBITDA, margin all well exceed market expectation

3. pre-COVID sales in FY20 1H 32.6m, then post COVID dropped to 11.8m in 2H versus current period at 32.8m

4. pre-COVID EBITDA in FY20 -7.1m versus current 1H FY21 EBITDA 3m

5. management upbeat on company outlook and look for potential M&A opportunities

 if the turnaround continues, share price will at least get back to previous level

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#Broker / Analyst Views
Added 2 months ago

16-Feb-2021:  Ord Minnett: Atomos Limited (AMS): Back on track

Analyst:  Jason Korchinski, Research Associate, (02) 8216 6348, jKorchinski@ords.com.au

  • Last Price: A$1.06
  • Target Price: A$1.35 (Previously A$1.24)
  • Recommendation: Buy (Previously Speculative Buy)
  • Risk: Higher
  • ASX Code: AMS
  • 52 Week Range ($): 0.30 - 1.24
  • Market Cap ($m): 231.6
  • Shares Outstanding (m): 218.5
  • Av Daily Turnover ($m): 4.7 3
  • Month Total Return (%): 23.3
  • 12 Month Total Return (%): -14.2
  • Benchmark 12 Month Return (%): -3.7
  • NTA FY21E (¢ per share): 16.1
  • Net Cash FY21E ($m): 18.3

The 1H21 result illustrated a return to form for AMS. As a global business, the early stages of COVID-19 had a drastic impact. However, by shoring up its supply chain and releasing new products, AMS is now benefitting from shifting trends in how individuals consume video content. The rise of Netflix and other online streaming/video platforms driven by lockdowns means there was surplus demand for original and high-quality content, for which AMS’ hardware helped to meet. AMS management has also demonstrated its ability to manage its fixed cost-base, maintaining a rate of ~$1.6m per month vs ~$2.3m per month pre-COVID. Management view this rate as the new norm and have called out relatively modest increases going forward. The view that AMS is likely to benefit further from the accelerated shift towards new content creation, combined with the positive gross margin reversion, gives us the confidence to upgrade our recommendation to a BUY and increase our price target to $1.35 (representing a TSR of 27%).

1H21 result

1H21 revenue of $32.8m showed strong signs of recovery, growing significantly on the 2H20 (+178% hoh). Gross profit margins also saw an improvement on the second half, with gross margins of 44.9% (+4.2%pts on OMLe), largely driven by a reduction in discounting and some new products. The reduced opex and strong GP margin resulted in an EBITDA result of $2.5m ($1m ahead of OMLe). Positive cash flow helped to bolster AMS’ balance sheet, with the company well placed with ~$23.3m. Management have called out the potential for M&A opportunities in the near future as a means of deploying the cash.

Changes to forecasts

AMS management, whilst not providing explicit guidance, did outline that 1H sales momentum is expected to continue into the second half and that it anticipates further margin improvements off the back of new products and revenue streams. Therefore, we have made modest increases to revenue, EBITDA and NPAT off the back of the 1H21 result. See page 3 for more details.

Key risks

The key risks for AMS include:

  1. Supply chain risks,
  2. Product obsolescence,
  3. Competition, and
  4. Global macro events.

--- Click on the link above for the full OM report on AMS ---

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#ASX Announcements
Added 4 months ago

Atomos exceeds guidance, delivers $32.6m in unaudited 1H’21 sales

Highlights:

• Delivered $32.6m of sales for 1H’21, well ahead of previous guidance of $28m+

• Cost control in line with previous guidance

• Atomos will be EBITDA and cash flow positive for 1H’21

• The Board is cautiously optimistic regarding the trends into 2H’21

View Attachment

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#chart
Added 5 months ago

17 Nov 20: Nice strong breakout above resistence of $0.80 from a low of $0.60.  If it holds above $0.80 and starts to continue up then it could be a good sign.

Management have be very positive about sales getting to above pre-covid levels.

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#Industry/competitors
stale
Added 7 months ago

I have used some of Atmos video production gear including their flagship Ninja monitor, so I thought I would weigh in. As a user/customer, fantastic business that realy provides prosumer and professional gear that enhances the usability and functionality of the camera being used. As long as they keep delivering peripherals that are one-step ahead of the camera manufacturers, I see them continuing to have decent sales in the film and television industry.

I do not hold AMS...but I have thought about it.

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#Bull Case
stale
Added 7 months ago

18/9/20 its a buy AUSBIZ Adam Dawes, Henry Jennings

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#Broker / Analyst Views
Added 8 months ago

30-August-2020:  Ord Minnett: Atomos Limited (AMS): Leave FY20 on the cutting room floor

  • Last Price: A$0.52
  • Target Price: A$1.24 (Previously A$1.15)
  • Recommendation: Speculative Buy
  • Risk: Higher

Atomos’ supply chain, from its R&D, manufacturing, wholesalers and endconsumers have been highly impacted by COVID-19 restrictions. It has materially limited the company’s ability to refine, launch, market and sell new and existing products. These issues are, however, temporary. While FY20 was a year to forget, the shock has offered a chance for the company to reset its cost base to move forward more profitably. We expect long-term margins to be up on our forecasts at initiation in Dec-19 thanks to permanent cost-outs which see AMS breaking even at a revenue rate of ~$4.5-5m per month (OMLe) compared with ~$3m of monthly revenue to start FY21. With a recovery on the horizon, new products in development to take advantage of streaming/live content production and a long-term thematic intact, we retain a Spec. Buy. Our target is now $1.25.

FY20 a year to forget

  • FY20 sales declined by 17%, with 2H20 down 60% on pcp. While costs were extracted through the 2H, this happened over the half (ie not fully realised for the whole period), resulting in an EBITDA loss of $8.1m (OMLe $5.9m loss). The balance sheet ended in good shape, holding ~$19m in cash and ~$17m in inventory, with no debt.

Treatment more important than the virus

  • AMS flagged at the 1H20 result that COVID-19 caused production and product development delays due to scale-down of Chinese facilities. In time, the virus also saw border closures and postponement/cancellation of trade shows, seeing key marketing and selling opportunities lost.
  • In response, the company has taken a hard line on costs, which drop its break-even point to ~$4.5-5m per month of revenue vs the average in 2H20 of ~$2m per month, and the Jul/Aug-20 run rate of $3-3.2m.

Stay the course, keep rolling

  • We remain positive on Atomos’ market positioning and structural growth in entertainment and social markets where the business is not as well penetrated. While COVID-19 has delayed products and sales into these markets near-term, we still see a significant opportunity at hand. Acceleration of streaming product development could offer a short-term...

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#Overview
stale
Added 8 months ago

Who are they?

Atomos (AMS) are a global video tech. firm that aim to enhance video content creation with ‘products’ that connect imaging & computer editing.

These products are

·         phone/photo cameras (Shinobi, Ninja)

·         Pro video cameras (Shogun, Sumo,)

·         & Entertainment devices (Neon)

More information can be found on the company website.

Pro video production related sales make up most of the revenue – 76% IN FY19.

 

They currently have operate on a global scale with offices in the US, France, Japan, UK, Germany but are based out of AUS. This gives unprecedented market potential within the video engineering market.

AMS have established “strategic relationships” with major tech. providers including Apple, Adobe, Sony, Canon, Nikon, Panasonic & more. Yet I am unsure what these partnerships represent…

 

Very interesting company with seemingly leading tech. within their industry. COVID has smashed their revenue stream, but with online video production looking to be the future of the industry it could be a long term hold at cheap price.

 

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#Risks
stale
Last edited 11 months ago

It is worth keeping in mind that this is really a hardware/device company, which doesn't have a huge moat.

An example of a bear thesis - GoPro. See the atached image of the share price over the past 5 years.

GoPro developed products for a more mainstream market compared to AMS and so was always likely to attract strong competition.

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##Australian Technology ETF
stale
Added one year ago

Hi all, I think there are some upsides to this new ETF that has been launched (which I believe will be quite popular), and I believe that some of the smaller companies such as Atomos, Volpara Health Tech etc will benefit and increase by being part of this fund.

Due to these companies now being included in an ETF, theoretically it'll jump a little. Similar to companies jumping when they get included into the ASX200. Obviously it won't be this big but I thought it was worth a mention!

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