CTD reported today.
Share price has been smashed - down 18% at time of writing.
Result was a bit disappointing but the correction is overdone in my view.
The background here is that CTD grew very strongly until COVID hit and the travel industry got hit hard. CTD made a big US acquisition at that time, which good companies do when competitors struggle. CTD were able to do that because they had such a strong run leading up to COVID.
Of course, their results in COVID got hit and they are still recovering.
The share price correction is a reaction to the results not returning as quickly as the market would like.
1H24 result
- revenue was +25%
- Underlying EPS +160%
As you can see these are strong numbers.
Full year result has been downgraded for the following reasons
- UK migration contract not delivering expected revenue
- US market revenue constrained by continuing hire air fares which have now reduced by 20%
Full year underlying NPAT is being revised down to $125-$140M. FY23 was $92M.
So we are still talking full year result of +30% for a company on current P/E of 28. Forward P/E will be about 19.
Looking at it another way. Full year result will take EPS back to 2019 levels when the share price varied from $19 - $33. At time of writing it is $16.
