Journeo Share Discussion Threads

[adamb1978] 04/1/2024 09:59

Hi Philly

Great post and your thesis is similar to mine - getting to a 40p-50p EPS and PE in the 20x-25x range, leading to a £10 share price within 2-3 years.

Also agree about a divi. I'm not bothered with it myself but others are and therefore would be good to increase the pool of possible investors. I think there has to be a good chance that they introduce a small one this year.

Adam

[philly cheesesteak] 04/1/2024 09:39

Still think that this looks like the next Tracsis. The measly current market cap is out of sync with material profitability, significant cash balances, appetite for further M&A, quality management & growing recurring revenue base (£6m at YE as per the Mello presentation).

My thesis is that EPS growth + PE expansion to align with Tracsis will result in shares continuing to move higher over the next few years.

If the 23.1p FY24 EPS forecast grows to 35-40p by FY26 (£70m top line @12% OM would give ~38p), and the PE normalises to 24x, shares would trade at £9.12.

Furthermore, in the next 3 years they should generate ~£15-20m of FCF, to add to the £10m balance they likely finished 2023. This allows for 2 things; further accretive M&A + the establishment of a small dividend to attract income investors.

I think it will be useful to dig further into the Tracsis comparisons in future posts, particularly how they've grown through self funded M&A.

[babbler] 04/1/2024 09:39

Tipped in telegraph for a good 2024 today

[eeza] 27/12/2023 07:09

Holdings RNS

DSM (which is winding down) reduces.

[vfast] 13/12/2023 10:53

Just to note the MM's are bidding up to 36,000 shares at 270p. Looks like someone is after a sizable amount of shares.

[tudes100] 07/12/2023 00:31

CEO talked in HY webcast about medium term target of 70m rev's & 10% operating margin

[hydrus] 06/12/2023 20:54

'FY24 revenue growth forecast to be around 4% & FY25 similar. ~10x PE makes sense on that basis'If you are valuing it on earnings (PE ratio) shouldn't you be using forecast profit growth rather than revenue growth? Profit growth is forecast to be 16% in FY24. So PEG is low.With a history of beating forecasts also I suspect profit growth will be a heck of a lot higher.

[vfast] 06/12/2023 20:25

It may pull back after a very good push up but I don't see it coming back to anywhere
near 216p / 220p.

The graph show the share price is climbing the mountain very nicely. I expect another push up this year / early next year 300p plus mark.

The potential is significant which is not reflected in the share price

[pyemckay] 06/12/2023 17:06

Did you read the latest update? Margins are expected to increase next year. It may have got ahead of itself last week or so and its most probable a pullback to 220-240 is ahead.

[74tom] 06/12/2023 16:10

Given the illiquidity here + how overbought it still is (RSI @74), I wouldn't be in the least bit surprised to see this fill the gap back to 216p over the coming weeks.

FY24 revenue growth forecast to be around 4% & FY25 similar. ~10x PE makes sense on that basis, particularly given the low margins + only around 10% of revenues currently being recurring (as per the September IMC presentation).

A solid company but some look to have got overexcited IMO. If they can find further earnings accretive deals like IGL then of course it gets more interesting.

[dealit] 05/12/2023 15:05

That is good to see eeza, less than 12m shares in circulation and with such growth potential ticks all the boxes IMHO.

[eeza] 05/12/2023 13:26

Tipped again by ST in IC, yesterday.

[nchanning] 05/12/2023 11:12

As Mark Minervini says when you see a growth stock breaking out , you need to see whether it's a tennis ball or an egg . Today was the first time Journeo tried to pull back and it's bouncing like a tennis ball ....

[this_is_me] 01/12/2023 13:25

Yes, I am delighted with my holding.

[batham1] 01/12/2023 12:47

Blimey Bonanza

[babbler] 01/12/2023 12:30

Boom. Breakout

[philly cheesesteak] 01/12/2023 12:22

Researched this off the back of Tuesday's trading update. Noted the supply at 230p & the Mello presentation & decided I'd rather take a position post presentation if the share price indicated investor excitement. Today we have the answer and I now have a significant position!

Tracsis is the obvious comp here, seeing as they sell software to the transport sector. Valued at £264m today and has forecast 2024 PBT of £15m with EPS of 40p, so is on a P/E of 20x but is only growing at ~5% PA.

Historically, it has charted a similar path to JNEO. Shares were trading at 50p at the start of 2012 and re-rated to £5.50 by the end of 2015. They had 24m shares in issue though, so by the end of that run the market cap sat at £132m and they had reported pre tax profit of £4.2m, reported EPS was 12p, so their PE was >40x, so I agree with you on valuation @NChanning.

In my view, Journeo is under the radar & under appreciated. If it becomes a PI favourite then a journey to £10 over the next 3 years should be very feasible indeed, particularly if they can continue to make earnings accretive acquisitions funded via FCF.

[madmix] 01/12/2023 12:17

The NMS is 1,000 shares, so you can deal in that size by phone.

The alternative is to wait for the price to settle, then you can usually deal in around 5,000 without too much trouble.

JNEO is my largest small cap position, FWIW.

[johndoe23] 01/12/2023 12:12

Thanks to you both. Might regret but can't buy here, looking at chart was hoping for pullback to 210-215 region

[madmix] 01/12/2023 12:11

There was an overhang of stock around the 230-232p level for the past few days. Now that's cleared the price can move up on small volume. I suspect it's just FOMO rather than a tip.

[davidosh] 01/12/2023 12:11

They were incredibly popular at Mello yesterday and did two full house presentations

[johndoe23] 01/12/2023 12:07

Tipped somewhere as flurry of buys from 11

[johndoe23] 01/12/2023 12:06

Came across this earlier this week. Looks good value! Missed opp to buy at 230p yesterday

[nchanning] 01/12/2023 11:55

Maybe I'm old fashioned but IF revs and EPS were to go from 13m / 2p in 2020 , to 70m /50p in 2026 I'd say that company deserves a multiple of more than 20x . One other nugget from management presentation was that the effect of all the additional Uk government transport spending programs hasn't even kicked in yet . Multi IQ , whilst a small acquisition , is seen as a beachhead to establish Journeo Europe with more huge markets to go for . Timing of the next batch of MTA orders for Infotec not known yet (and not contracted), but only a third of the New York subway trains kitted out in the first tranche for 18m dollars . Opens up another huge market in the USA