Shorters may be pushing for a price collapse but the papers generated by edisoninvestmentresearch show a positive path to profitability. Once the fog starts to clear and we have some positive numbers showing progress this share will show a rapid climb to its fair value. Year end report onwards?
The likes of EE together with the other big long term contracts wins now coming through indicate a strong future for AVN. These companies would have done more than their fair share of home work before signing up long term deals. Plus the government have put their name to Avanti which is going to bring in millions. Why also would we have directors buying up shares. All signs of a long term successful business if you ask me.
I agree about the strong buy but not about the creditors part, Hylas 1, Hylas 2, Hylas 2b, Hylas 3, Hylas 4 and Artimus should all be generating good income by 2018 with costs reducing along the way. Its interesting that TW and his team are actively targeting this company and the ceo, they say bust by christmas 2016 I don't agree at all. The EE contract is a turning point i think, what a project to have on the books when showcasing the company in new regions. IMO its all down to sales now need ti fill the fleet asap with new telcos signing up for Hylas 4.
What is reflected in the share price is that the market cap has dropped to just over one tenth of its value after launch of H1- the bet is that this company will be owned by its creditors within the next three years
I shall hold as hope triumphs over experience - sometimes
"SES has announced its intention to buy the outstanding 49.5% minority in O3b, the medium earth orbit (MEO) Ka-band high throughput satellite (HTS) constellation. SES is paying $2.6bn in EV (including $1.2bn of 9.5% coupon debt) and is to complete the outstanding $600m capex programme to deploy the fleet. The purchase represents an EV/sales multiple of 26x expected FY16 revenues. The valuation has interesting read across to Avanti as it reflects the value the industry is placing on the newer HTS players. The FY16e Avanti EV/sales multiple is just 6x. Our view remains that as the market recognises the ability of Avanti to execute its plan to reach a highly cash generative phase from mid-2018, this value gap should close. That implies substantial upside for Avanti shares."
"The O3b network is a MEO constellation of Ka-band satellites that is being deployed to provide HTS connectivity. SES has announced the deal in the teeth of market concerns over satellite capacity pricing, which we feel relate to the more expensive established Ku-band capacities being disrupted by the new HTS Ka-band entrants such as Avanti. This has led to recent profit warnings and share price weakness for some of the more mature FSS providers. While the ability to more attractively refinance the business is clear, it also suggests SES may regard the timing as a value opportunity following recent sector turbulence and having marginally increased its stake to a majority only in late April. Avanti has established a leading position as the only listed pure Ka-band HTS player with a geostationary earth orbits (GEO) satellite network, with $1.2bn of assets already deployed. A large capacity satellite (HYLAS4) is on track for launch in 2017 completing Avanti’s capex, tripling revenue potential and significantly strengthening cash flow."
That was a crazy drop yesterday. Looks like it was just momentum and sellers that caused that to happen. We now have a decent gap back up to fill. Then with all the positive news flow, progress and analysts targets all saying buy with none saying sell we should see this progress back to a realistic trading range
427p price target Avanti has reported Q3 trading that not only allows it to maintain its guidance for revenue growth, delivering a positive EBITDA in Q3, but clearly indicates a path towards free cash generation. With contract momentum building with high quality customers, recurring revenues are growing, satellite capex is almost complete and the financing facilities nearing finalisation appear more than sufficient to execute the plan. As this progress becomes more widely appreciated, we expect the share price to be released from its shackles and start to trend towards cash-based fair values. Our own capped DCF still returns a fair value of 427p per share.
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