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Nearmap Limited
NEA Details
Latest Update: Nearmap Limited (ASX: NEA) offers high resolution aerial imagery, geospatial tools, AI data sets, and city-scale 3D content to companies via its processing software and patented camera systems. On 11 May 2022, NEA reported filing a fourth IPR (inter parties review) against an EagleView/ Pictometry that the latter stated in the current filing it filed against NEA. In March 2022, NEA lodged three IPR’s against EagleView and challenges later to validate. NEA will seriously pursue the matter related to patent protection and its intellectual property rights.
1HFY22 (ended 31 December 2021) Results & Business Update: Group ACV rose from ~$54.2 million in 1HFY18 to ~$147.7 million in 1HFY22. The record growth in the Group ACV (annual contract value) reported as of March 2022 is driven by the substantial increase in the North American ACV portfolio, core verticals growth, and the recent largest ever government contract win.
Comparative Growth in ACV & Revenue; (Analysis by Kalkine Group)
Key Risks: The company faces technological shifts, growth in new verticals and markets, retention of top resources, regulatory hurdles, and peer competition.
Outlook: NEA plans to exercise disciplined cash management and introduce HyperCamera3 (HC3) in Australia in FY22. It expects the ACV portfolio to close at the upper end of the revised range of ~$155 - $160 million (versus the upper end of ~$150 - ~$160 million range and ~$128.2 million in FY21).
Valuation Methodology: EV/Sales Multiple Based Relative Valuation (Illustrative)
Source: Analysis by Kalkine Group
*% Premium/(Discount) is based on our assessment of the company’s NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.
Stock Recommendation: The stock of NEA gave a negative return of ~29.78% in the past six months and a negative return of ~46.52% in the past nine months. The stock is currently trading lower than the 52-weeks’ average price level band of $1.065 - $2.330. The stock has been valued using the Enterprise Value to Sales based illustrative relative valuation method and arrived at a target price of low double-digit upside (in % terms). The company might trade at some discount than its peers’ average EV/Sales multiple, considering a negative bottom line, increased growth investments in FY22, and a negative ROE. For this purpose of valuation, a few peers like LiveHire Ltd (ASX: LVH), Hansen Technologies Ltd (ASX: HSN), Infomedia Ltd (ASX: IFM), and others have been considered. Considering the current trading levels, growing ACV of the North American portfolio, improving cashflows from both regions, the start of production of HC3, an indicative upside in valuation, improved ACV guidance for FY22, and associated key business risks, we give a ‘Speculative Buy’ rating on the stock at the closing market price of $1.155, down by 0.431% as of 26 May 2022. Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.
NEA Daily Technical Chart, Data Source: REFINITIV
Bionomics Limited
BNO Details
Material Updates: Bionomics Limited (ASX: BNO) undertakes the development of novel drug candidates such as BNC210 to treat patients suffering from central nervous system disorders such as Social Anxiety Disorder (SAD) and Post-Traumatic Stress Disorder (PTSD). On 12 May 2022, Director Peter Miles Winston Davies acquired ~269,984 shares at ~$39,147.68 in BNO.
Upcoming Investor Conferences: Dr Errol De Souza, Executive Chairman, will attend the following investor conferences on behalf of BNO:
Q3FY22 (31 March 2022) Highlights: March 2022 quarter witnessed the initiation of Phase 2 clinical trial (the PREVAIL Study), listing on NASDAQ, participation in the Cancer Therapeutics CRC (CTx) with a receipt of ~$263,634 in licensing revenue.
Maintaining Liquidity Position; (Analysis by Kalkine Group)
Key Risks: The company conducts clinical trials and faces the risk of uncertain outcomes and increased R&D costs. Prevalence of COVID-19 adds to the risk of commercialisation and may cause regulatory delays.
Outlook: BNO remains well funded to progress the clinical trial development of BNC210 in the treatment of Social Anxiety Disorder (SAD) and Post-Traumatic Stress Disorder (PTSD), with the grant of fast-track status for both studies from the USFDA.
Valuation Methodology: EV/Sales Multiple Based Relative Valuation (Illustrative)
Source: Analysis by Kalkine Group
*% Premium/(Discount) is based on our assessment of the company’s NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.
Stock Recommendation: The stock of BNO gave a negative return of ~12.67% in the past three months and a negative return of ~48.33% in the past six months. The stock is currently trading lower than the 52-weeks’ average price level band of $0.059 - $0.240. The stock has been valued using the Enterprise Value to Sales based illustrative relative valuation method and arrived at a target price of low double-digit upside (in % terms). The company might trade at a slight discount than its peers’ average EV/Sales multiple, considering the increased net loss in 1HFY22, continuing negative operating cashflows, and risk of commercialisation. For this purpose of valuation, a few peers like Pacific Edge Ltd (ASX: PEB), Imugene Ltd (ASX: IMU), Pro Medicus Ltd (ASX: PME), and others have been considered. Considering the low trading levels, the grant of fast-track status on both studies by the US, addition of trial sites in the US, low debt-to-equity levels, revenue stream potential from the CTx agreement, an indicative upside in valuation, and associated key business risks, we give a ‘Speculative Buy’ rating on the stock at the closing market price of $0.062, down by 7.462%, as of 26 May 2022. Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.
BNO Daily Technical Chart, Data Source: REFINITIV
Note 1: The reference data in this report has been partly sourced from REFINITIV.
Note 2: Investment decision should be made depending on the investors’ appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the Valuation has been achieved and subject to the factors discussed above.
Technical Indicators Defined: -
Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.
Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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