Carbon Revolution Limited

CBR Details

Q3FY22 Highlights: Carbon Revolution Limited (ASX: CBR) is involved in designing, manufacturing and marketing single-piece carbon fibre wheels. Recently, the company released Q3FY22 results, wherein it recorded total revenue of $7.9 million with total wheels sales of 2,926.

• The majority of sales were related to the GT500 program, where shipments are likely to be completed during Q4FY22.
• Net cash outflow from operations was $2.1 million and CBR closed the quarter with a cash position of $34.7 million.

Revenue Trend (Source: Analysis by Kalkine Group)

Key Risks: CBR’s operational and financial performance could be affected by the rising market share of its peers in the industry. The company is also exposed to risks arising from instability in demand and supply.

Outlook: For FY22, the company would be focused on implementing the production ramp of the Corvette Z06/Z07 program and supporting the increased production for the Ferrari programs. It would also be focused on driving a structured program of improvements to quality and machine performance to enable smooth flow through the factory and improved throughput and cost.

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 CBR is trading near its 52-week low level of $0.505, offering a decent opportunity for accumulation. The stock has been corrected by ~26.05% in the past one month. The stock has been valued using an EV/Sales multiple-based illustrative relative valuation and arrived at a target price of low double-digit upside (in % terms). The company can trade at a slight discount to its peers, considering the COVID-19 led uncertainties and losses in business, etc. For the purpose of valuation, peers such as GUD Holdings Ltd (ASX: GUD), ARB Corp Ltd (ASX: ARB), Apollo Tourism & Leisure Ltd (ASX: ATL), and others have been considered. Considering the expected upside in valuation, decent wheel sales, attractive outlook, current trading levels, and key risks associated with the business, we recommend a ‘Speculative Buy’ rating on the stock at the closing market price of $0.520, down by ~6.306% as on 04 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.

CBR Daily Technical Chart, Data Source: REFINITIV

Cettire Limited

CTT Details

Insights of Q3FY22: Cettire Limited (ASX: CTT) is a global online retailer which offers a large selection of in-demand personal luxury goods via cettire.com. During Q3FY22, the company witnessed strong momentum and rapid growth in all key metrics.

Financial Summary (Source: Analysis by Kalkine Group)

Key Risks: The company’s performance could be affected by instability in the demand and supply of products in which it deals. In addition, CTT is exposed to a more complex regulatory environment; any failure could lead the business to fines, penalties, etc.

Outlook: The company would be focused on maximising revenue by further investing in brand and customer acquisition in FY22. In addition, it would continue to develop its deep and diverse supply relationships and invest in world-class proprietary e-commerce technology.

Stock Recommendation: The stock of CTT is trading near its 52-week low level of $0.570, offering a decent opportunity for accumulation. The stock has been corrected by ~49.12% in the past one month. The stock has an EV/Sales multiple of 1.1x against the industry median (Consumer Cyclicals) of 1.6x on a TTM basis. Thus, it seems that the stock is undervalued at the current trading levels. Considering the valuation on a TTM basis, rising revenue, growing number of orders and active customers, decent outlook, current trading levels, and key risks associated with the business, we recommend a ‘Speculative Buy’ rating on the stock at the closing price of $0.575, down by ~6.504% as on 04 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.

CTT Daily Technical Chart, Data Source: REFINITIV 

Atomos Limited

AMS Details

Launch of New Products: Atomos Limited (ASX: AMS) is engaged in the development and commercialization of video monitors/recorders for the rapidly growing video content creation market. As announced on 22 April 2022, the company launched two new network-connected devices, the ATOMOS CONNECT, and SHOGUN CONNECT. The Company also announced a partnership with Frame.io, which sees its new devices integeration with Frame.io’s Camera to Cloud (C2C).

1HFY22 Highlights: The below picture gives an idea of the company’s financial performance in 1HFY22:

Financial Summary (Source: Analysis by Kalkine Group)

Key Risks: The company is exposed to a risk arising from the shift in new technology within the industry. In addition, the business could also be affected by the rising market share of peers in the industry in which it operates.

Outlook: For FY22, the company expects revenue of over $95 million and EBITDA margins of 12-15% and expects to report software ARR of over $3 million and $6 million in FY23 and FY24, respectively.

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 AMS is trading at par to its 52-week low level of $0.605, offering a decent opportunity for accumulation. The stock has been corrected by ~34.89% in the past one month. The stock has been valued using an EV/Sales multiple-based illustrative relative valuation and arrived at a target price of low double-digit upside (in % terms). The company can trade at a slight discount to its peers, considering the COVID-19 uncertainties and lower net margins, etc. For the purpose of valuation, peers such as Breville Group Ltd (ASX: BRG), Shriro Holdings Ltd (ASX: SHM) and Audeara Ltd (ASX: AUA) have been considered. Considering the expected upside in valuation, rising revenue, growing number of order and active customers, decent outlook, current trading levels, and key risks associated with the business, we recommend a ‘Speculative Buy’ rating on the stock at the closing price of $0.605, down by ~8.333% as on 04 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.

AMS Daily Technical Chart, Data Source: REFINITIV 

Note 1: The reference data in this report has been partly sourced from REFINITIV

Note 2: Investment decisions 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 analysis has been achieved and subject to the factors discussed above alongside support levels provided.

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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