Shearwater Share Discussion Threads

[chrisdgb] 29/4/2022 11:04

Would love to see some weekend press comment to a wider audience....

[northwards] 29/4/2022 11:03

Interesting we haven't seen any director buys post update. Perhaps further contract news close and they are precluded from buying ?

[rivaldo] 28/4/2022 10:38

Here's a link to Berenberg's reiteration of their Buy and 380p target:

[husbod] 27/4/2022 16:51

Reckon this is still way under the general radar. Might be mentioned in the IC this week given today's RNS. A Positive comment might see some share price action.

[bdbd11] 27/4/2022 16:09

Volume surprisingly low, just did a small top up at 136.95 - a bargain!

[husbod] 27/4/2022 15:14

We can but hope km18 - last sentence of your post.This has been a really frustrating share to hold let alone the highly irritating drop in the share price after the fund raising but maybe there is at last some indication that this is worth topping up (again).

[hybrasil] 27/4/2022 13:51

I would have thought that the price move would be greater. Super RNS. Broker upgrades

[zico01] 27/4/2022 12:20

A strong finish to the year especially in Q4 has led the company to exceeding it's market expectations for the year.

Big thumbs up to the management.

[km18] 27/4/2022 12:07

Shearwater Group PLC is focused on offering digital resilience solutions to cyber security companies. Subsequently, the firm is currently seeking to acquire and develop information security companies with a solution and product. These effective solutions were efficiently reflected on the company’s prospects since the firm managed to secure new contract wins while renewing previous long-term contracts. As a result, revenue is expected to surge by 12%, resulting in an EBITDA hike to £4.2m from £3.5m in 2021, hence the firm is trading ahead of market expectations. Consequently, it implied that EPS growth reached 18%, enabling shareholders to derive attractive return on investments. This supporting evidence is explained by the firm’s ability to capture intrinsic value and optimise organic growth, illustrated by the EV/EBITDA of 7.36x. Given the robust financial performance, P/FCF leapt to 19.3x, which in turn signified that operating, investing, and financing activities were funded effectively. 22.8x, Although the firm managed to capitalise on these opportunities, the security is still undervalued with respect to its peers, since the firm’s P/E ratio stands at 9.9x, lower than the with IT industry P/E ratio of 39.1x, thus it is likely to soar in value

[husbod] 27/4/2022 10:27

Seem to have abandoned any talk of acquisitions which was of course the rationale behind the last fund raising and are concentrating instead on organic growth.More likely to be the acquired than the acquirer in the medium term?

[rivaldo] 27/4/2022 10:14

Cheers chrisdgb, Berenberg's 380p target should turn a few heads.

Completely agreed boadicea. Particularly given this month's £21m long-term contract win with a major telco, and last month's $4.1m win with a leading financial player giving enocuragement that SWG are moving up to a new level.

It's not often you see a growing cybersecurity company on almost a single-digit P/E (OT : although SYS are also similarly under-rated at present!).

Cenkos have also issued a new note this morning - they say fair value is at 200p+.

They've raised this year's forecast to 13.7p EPS, and see a £6.8m cash pile at the end of this year. They conclude:

"Fair value lies at 200p+. Excellent delivery and the prospect of returning project work bodes well for FY23E and beyond and is not being recognised in the share price. A rating of sub-5x EV/adj EBITDA in FY23E is anomalous and fair value for such a business with a cash positive balance sheet in our view lies over 200p. Buy"

[northwards] 27/4/2022 09:33

And net cash has grown 800k compared to the half year.

[boadicea] 27/4/2022 09:01

I think it is time to forget the history and look to the future. There are peer companies showing rather pedestrian progress which, even after recent falls, are on ratings double or more that of SWG, albeit with a generally more stable past.
This is a volatile sector and a change of sentiment can double (or halve) a share price in a short space of time.
SWG started the year with the buyer's advantage of excessively low expectations built in and is only just starting on its process of re-rating. Steady progress of the type now being reported could easily double it from here within a year or so (imho) with more to follow if it begins to sparkle.

[chrisdgb] 27/4/2022 09:00

Berenberg see momentum building, 380p price target. 'potential significant upside'

[jbravo2] 27/4/2022 07:54

Yes
Solid update
A move back to £2 is more than deserved
Especially when you consider next years revenue will be 12% up with just the one big contract win announced this month and steady state on everything else

[rivaldo] 27/4/2022 07:40

Progressive Equity Research have increased their forecasts to 11.9p EPS for last year, and to 14.1p EPS for this year (from 13.8p).

They summarise:

"The CEO’s comments strike a confident and enthusiastic tone, confirming
that progress has been made with both new and existing clients, and
pointing to the company’s growth trajectory. Shearwater looks to be
delivering and moving to a revenue growth path, and more positive news
on contracts or guidance could well see the market valuation metrics move
to reflect this."

[sidam] 27/4/2022 07:33

Well, I got that wrong. Much better than I expected. Cash is down, but that could be due to end of year contracts and changes in working capital. Pleased with holding which is showing quite a decent profit.

[northwards] 27/4/2022 07:20

Very pleased with that.

[rivaldo] 27/4/2022 07:11

Trading update is out - revenues and EBITDA well ahead of expectations!



EBITDA will be a MINIMUM of £4.2m, compared to £3.8m forecast by Cenkos, which I'm guessing will give rise to around 12.5p historic EPS.

SWG would appear to be in rude health, winning new customers, having the security of a £5.6m cash pile, and a very bullish outlook:

"We have returned to a revenue growth trajectory, underpinned by a strong financial position, and we remain excited for what the future holds."

[earwacks] 26/4/2022 12:07

I heard that last years Ebitda should be met, when the share price went over £2 briefly. The revenue may be lower. Agree the outlook looks positive after another tricky year and still no sign of the elusive acquisition

[sidam] 26/4/2022 10:25

I am not sure that year to be reported is going to be that super as contracts were won very close to year end, but the outlook for this year, which is what really matters, does look very strong to me.

[lammylover] 26/4/2022 09:37

Update due by end of the month - so just 3 days left...

[northwards] 26/4/2022 09:07

Update must be imminent.

[someuwin] 26/4/2022 08:59

Can't buy much more than £2k online.