What's a fair revenue multiple?

One way to estimate that is to back calculate it from an assumed EV/EBITDA multiple and an assumed EBITDA margin. If we assume 8x EV/EBITDA is fair and take an EBITDA margin of 10% (which is roughly double the current normalised numbers: i.e. $0.7m for H1FY22), one arrives at a fair revenue multiple of 0.8x (8 x 0.1).

Those are simply some back-of-the-envelope numbers to get a 40,000-foot view of where we are right now relative to what is fair. Of course, one might argue that the US business is loss-making and that if AMX can get that side of the business under control the EBITDA margin may end up much higher, but for the moment it is circa 6% on a normalised basis ($0.7 x 2 / 22) across the business and so a 10% EBITDA margin seems fair.

My other reservation here is that the market size is very small being only $80m for MetroMap and only $50m for LiDAR. However, the market size for 3D is much higher. If we combine the $80m and $50m, we get to a $130m market size. Given AMX has about 15% share versus NEA at 85% share, that suggests a fair value of around ~$19.5m. But, again, that assumes the current status quo remains constant.

AMX's opportunity is to steal share off its much larger competitor, Nearmap.

Really enjoyed reading the well-balanced Straws here from Wini et. al.

From my limited understanding, there are a lot of shares now in the hands of employees who have resigned since the escrow release.

This includes Serafin, Tomlinson and Deuter who have all left the company. In addition, Dunow has ceased being a KMP.

After many loyal years to the company, it appears that they are cashing in, perhaps for lifestyle reasons.

Unfortunately, this has put enormous pressure on the share price, and it is likely to continue for a while yet, with Morgans remaining the main seller (broker data below).

The other main risk that I can see is that the market size is not significant, in Australia at least, with a domestic TAM of circa $130m.

Once selling pressure eases, it looks primed for a rebound, assuming the fundamentals remain intact but the risk of further selling remains.

Another way to value this business might be with an ARR multiple; AMX is currently trading on around 10x ARR ($6m ARR), although this doesn't reflect the sizeable non-recurring revenue base that has been established.

Remains on the watchlist for me for the moment.

Would love to get perspectives from anyone who has been following the shareholder registry evolve over the last 6 months as to when selling pressure might be likely to ease.