Shearwater Share Discussion Threads

[rivaldo] 21/7/2022 09:40

Thaiger posted above that results will be next Tuesday 26th July, though I can't see this in an RNS or on their web site. Perhaps he's contacted them directly.

We already know the results will be ahead of expectations, with EBITDA at least £4.2m plus a £5.6m cash pile and a strong outlook. There's every reason to be positive here.

Progressive Research's forecast of 14.1p EPS for the current year to March'23 is likely to be increased after the results, so SWG will be well and truly on a single-digit P/E - and even less if you adjust for the cash which is approaching 20% of the £33m m/cap.

[solarno lopez] 21/7/2022 08:07

Results soon ?

[solarno lopez] 20/7/2022 15:28

In that case Bodicea its worth a punt

[boadicea] 19/7/2022 13:57

I agree with 236 and 237.

The valuation was very low for its sector even before the dip below a pound. The business has been going through a transition and trust in management after pricey acquisitions has been questionable.
However if we have now cleared out disillusioned or forced sellers there is potential for strong appreciation towards the more typical valuation factors seen in its peers.

Today's price move indicates that expectation is building. As always, for a sustained recovery and to avoisd a relapse, it is important that the coming results should meet, or preferably exceed, those expectations.

[zico01] 19/7/2022 13:39

About to break £1.40

[sidam] 19/7/2022 13:21

Although I am not a chartist I think the chart pattern looks interesting. It has has been going sideways for a few months now and it looks as though that might be breaking upwards. Given that it has made a recent high whilst the small cap market has been in turmoil means that its relative strength is good and earlier it made a nice head and shoulders reversal pattern.

My guess is that these positives could lead to a significantly higher price over the next year. I would love to hear the views of any proper chartist if there are any who follow this stock.

Anyway, I am a happy holder at present and showing a decent profit. I bought on fundamentals not on the chart.

[thaiger] 19/7/2022 11:39

Result 26 July

[chrisdgb] 19/7/2022 09:13

middle of next week I would think..?

[northwards] 18/7/2022 09:09

Before end July ?

[chrisdgb] 17/7/2022 09:48

Not too long until final results.............

[chrisdgb] 17/7/2022 09:48

Not too long to final results, looking forward to it.......

[northwards] 05/7/2022 10:20

Yes, I think the ship is turning. We probably overpaid for certain acquisitions and that knocked confidence for quite some time, but beginning to look much more rosy now.

[rivaldo] 05/7/2022 08:31

Looking strong here, with more buying coming in at the full 140p offer price.

We already know from the trading update that results will be ahead of expectations, the balance sheet is strong and the outlook is positive.

And this is for a cyber-security business on a single-digit P/E....

[jbravo2] 27/6/2022 11:42

Yes it moves on tiny volumes. It'd be a right laugh if there was actually any real volume wanted here.£2 before results or after?Either way, not long to wait

[its the oxman] 27/6/2022 11:39

Think we all know the tide has turned and this has every chance of going significantly higher.

[hybrasil] 27/6/2022 11:07

4 weeks to results which should be good ( and I hope that's an understatement)

[hybrasil] 27/6/2022 10:10

chrisdgb

At this rate your ambition should be fulfilled very quickly

[chrisdgb] 24/6/2022 11:50

All looking good, certainly have 200p as a relatively short term ambition....

[zico01] 24/6/2022 10:59

Good write up in Investors Chronicle :


Shearwater is a UK-based corporate resilience business offering cyber security software (own IP) and services operating across 46 countries with many large businesses (including tier 1 banks) as clients. Revenues total around £35mn, with historic (adjusted) earnings before interest, tax, depreciation and amortisation (Ebitda) of a little over £4mn forecast to grow at a compound annual growth rate (CAGR) of 20 per cent to March 2025, reflecting strong markets, cross-selling opportunities and a planned phase of new investment.

The software side has a typical structure, with high margins (>75 per cent gross ), selling through a two-tier distribution model, meaning low sales and distribution costs in-house. It owns the intellectual property (IP) for its two software brands SecurEnvoy (zero trust identity and access management) and GeoLang (tools that discover, classify and protect sensitive data and information across a range of storage locations and mechanisms). There is high recurring revenue here (>80 per cent) and >60 per cent of customers have contracts of three years or more.

Having spent the past two to three years wrestling with Covid-19 and various internal issues plus eliminating its historic debt, Shearwater is now in a position to expand in software by acquisition and/or investing in research and development organically. Its focus is the remaining quarter of the $40bn (£32.6bn)-plus security-as-a-service market not already covered (privileged access, cloud access and identity governance), a sector overall forecast to grow at a c16 per cent CAGR. Shearwater has £10mn in cash and untapped debt facilities to facilitate this, and buying well (management is happy to buy early-stage businesses) could bump baseline profits by as much as 50 per cent.

The services arm is larger by revenue (four to five times larger than software), but with lower margins (still a healthy 30 per cent gross) makes a similar level of Ebitda, giving the business a healthy balance. In services, a lot of revenue comes from selling third-party products and IP (hardware and software) in solution sets for core cyber security functions and monitoring plus consulting fees and the group’s in-house penetration testing – trusted hacking to show network vulnerabilities.

Good underlying market-driven growth augmented by anticipated investment mean that the 20 per cent growth being forecast here is tangible. Yet, the rating does not square with the prospects (specific and industry) – Shearwater’s enterprise value (EV)/sales ratio is just 0.65, the EV/Ebitda is less than 5 times and the price/earnings (PE) ratio is just 8.8 times year one. This is closer to the valuation you might expect for a mature cyclical rather than a high-growth industry. Darktrace’s equivalent figures are 4.8, 37 and >300, respectively.

Valuing Shearwater on sensible but still cautious ratios (1.8x sales, 12x Ebitda or a PE of 18) indicates a fair value as high as 250p (currently 118p). While this is a long stretch, must still be viewed through an appropriate risk lens and may prove out of reach, it does indicate that the current share price is likely to be materially overpricing risk, lingering too much on historic negative total shareholder returns (TSR) and underpricing potential, especially from fresh investment."

[northwards] 24/6/2022 10:05

Decent write up. Forthcoming results could be a useful milestone to better times.

[nightswatch] 24/6/2022 08:56

On balance yes

[chrisdgb] 24/6/2022 08:28

Interesting good...???

[nightswatch] 23/6/2022 18:30

Interesting write up in Investors Chronicle.