RE: Massively Undervalued14 Dec 2023 18:19
It's all OK, Sharehead and Hexam. Both of you are valuable contributors imo, and don't post annoying day-by-day useless price targets. Sharehead is always an uber optimist and a glass half-full type of investor, and may well be construed a borderline ramper, the reality is he isn't advocating that everyone on here keep buying the shares till they 50p or 100p or whatever ultimate target prices are. He/she feels the SP is very undervalued and appears surprised that we're not motoring along to those lofty numbers.
I'm an optimist too, just not at Sharehead's level though. and like to think that CPI will do well, but something fundamental has to change. Today's update was mediocre, and that's being very generous. The only reason why CPI held up OK today is because the market is spotting a fundamental change in the economic outlook and hence there was no selloff today. I know the broader IT services market quite well and I know from anecdotal channel checks (Wall Street buzz word thrown in) that Q3 was dire and Q4 is just about OK, but you can feel winds of change starting to blow a bit - just green shoots for now. If are to look past the update today, the key for me is to understand what further cost cuts in 2024 would look like, as steady revenue growth will be in bag if we don't sink into a recession. That is about the only thing that will set CPI up for sustainable FCF/profits, and a higher share price by extension. Where I absolutely don't agree with Sharehead is that higher SP can't just happen by itself or because of using AI in delivering services by partnering with MSFT - the management needs to have laser focus on cost control/reduction and focus on areas for incremental revenue growth. I share my views with Hex and TM1 that revenue growth was dire, but that's what drove them to cut headcount (finally). I really hope we see more of that in 2024, notwithstanding the impact it has on ordinary employees.
As soon as I saw the update today I knew my 10% upmove today prediction wouldn't come to fruition, ;-) but all I can say is thank god there's only a month more of JL. We need fresh ideas to turn this around sustainably. I'm still a holder and a believer!! Good luck.
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