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With you on your longer term view...... This is worthy of £350m valuation on £100m t/o and 70% margin ...... That looks very likely to be the trend at next interims IMHO
Lol remember a year ago was the only one talking in fact did make that statement.
In that time posted the history and the plus of this company.
Now the information being already done by everyone.
Long Term 800p share within 1 year , invested at 52p not sold a share
Hey TD Invest, yes that's a pretty good summary and basically reinforces the point that no one has any idea what Loop's forecast looks like. No doubt the uncertainty is hurting the valuation, there are a lot of companies out there with good forecasts and thus less risk so really can't blame funds for recycling out of this with gusto recently.
Where did you obtain the Panmure and Numis estimates? It looks like its only Progressive that is included in consensus as it matches exactly to their forecasts. They all seem very similar.
I would say that on a 10x EBITDA multiple LOOP is punching above its weight at this point in time. It would need to prove up the sustainability of its model and grow revenue and earnings over a longer (non-covid impacted) time period. We have little idea of what a true sustainable earnings figure for LOOP would be. And that terrible dip on the chart in 2019 reminds me of its recent disappointments. But maybe one day that will be all forgotten
Just to clarify the 2 new hubs are pre Comms and the new hires will likely sit outside in separate satellite hubs
Hi TD eloquently put ! To add to your conversation : within the 224 employees they have recently integrated a new German and French hub and seemingly taken 7/8 Microsoft specialists .... Likely take another 5 and create 3 hubs in competition whilst the current teams farm and generate fresh leads for them just to close ... Simple efficient and in an environment with mature infrastructure and a ***** trusted profile very profitable long term . The recent fremium offer is a low cost travel of the connected clients who will fill the premium space as they interact until possible contract SAAS conversion . SP is of course market led by the quality and knowledge of the commentary but do believe they are commentating on a vauxhall conference league game rather than the premiership
Alongside the existing business, the Teams explosion also creates a significant opportunity for Loop to offer secure cloud telephony services to Team users via Direct Routing, principally for important external calls, rather than internal calls. Loop’s product has the particular advantage that the quality of the audio is better due to Loop’s international private network, which is particularly so when there are lots of users on the call. The VoIP alternative in Teams is probably fine for 1 - 1 calls, and those internal calls where people have the patience to put up with any troubling audio. Loop’s product also does not require any downloads by those not using Teams, and Loop (probably rightly) claims to have much better customer service than Microsoft, AT&T etc etc. The pipeline of potential contracts is massive, at £25m per year. However, Loop has to invest significantly in new staff to exploit this opportunity and the conversion rate is unknown.
So taking all of this into account, in terms of comparing H2 2020 estimates with H2 2019 results, Panmure and Numis both have H2 revenue up 14.64% (23.1 as compared to 20.15), and Progressive up 13.46% (22.9 as compared to 20.15). In terms of H2 EBITDA, it’s the other way round, with Progressive up 75.8% (5.1 as compared to 2.9), Numis up 69% (4.9 as compared to 2.9) and Panmure up 62% (4.7 as compared to 2.9). I think I am right in saying that these estimates are based on the existing business alone, and give no credit for Direct Routing (which is also the case for the 2021 estimates).
In my view it is probably fair to say that these H2 estimates are conservative, because the last thing Loop wants to do is miss a target as it did in 2019. But they are probably not massively understating the position, as that would be silly given how far through the year we now are. So far so reasonably consistent across the three brokers/ analyst, and representing a consensus view.
In terms of the share price, however, I cannot identify any consensus. As far as I can see, Numis apply an 8-9 x 2020 EBITDA multiple to get to 270p and Panmure apply an 11 x 2020 EBITDA multiple to get to 324p. Progressive don’t offer a view. This is in circumstances where a not uncommon 13.5 x EBITDA multiple for small cap tech would give 424p (based on Progressive’s 17.3m EBITDA figure). Again, all very conservative, and no doubt driven by the scars of the past.
I suspect that it is the impact of this conservatism that sits behind commentators such as Paul Scott on Stockopedia saying that the “share price of LOOP has not properly reflected this stunning improvement in performance” and that “the market cap is lagging behind developments here”. ST said similar.
Obviously, DYOR.