Domain Holdings Australia Limited
DHG Details
1HFY22 Summary: Domain Holdings Australia Limited (ASX: DHG) is a real estate media and technology services business that is focused on the Australian property market. Subsequent to 1HFY22, DHG raised ~$162 million via Institutional Entitlement Offer, which would be used to acquire Realbase Pty Ltd. During the half, DHG maintained the pace of its business strategy evolution, which resulted in growth across key metrics.
Financial Summary (Source: Analysis by Kalkine Group)
Key Risks: The company is exposed to environmental risks, including increased energy prices and extreme weather events. In addition, it is exposed to a more complex regulatory environment; any failure could lead the business to fines, penalties, etc.
Outlook: Looking forward, the company will continue investing in its marketplace strategy. For FY22, the company anticipates ongoing costs to increase in the low teens range from the FY21 ongoing expense base of $195.5 million.
Valuation Methodology: P/E 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 DHG is trading near its 52-week low level of $3.665, offering a decent opportunity for accumulation. The stock has been corrected by ~4.37% in the past one month. The stock has been valued using a P/E multiple-based illustrative relative valuation method and arrived at a target price of low double-digit (in percentage terms). The company might trade at a slight discount to its peers, considering the high leverage and disruption in liquidity, etc. For the purpose of valuation, a few peers like REA Group Ltd (ASX: REA), Carsales.Com Ltd (ASX: CAR), and Seek Ltd (ASX: SEK) have been considered. Considering the expected upside in valuation, rising revenue and bottom line, recent capital raising, 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 $3.720 as on 14 April 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.
DHG Daily Technical Chart, Data Source: REFINITIV
Airtasker Limited
ART Details
1HFY22 Financial Summary: Airtasker Limited (ASX: ART) is in the provisioning of a technology-enabled online marketplace for local services. During 1HFY22, Gross Marketplace Volume (GMV) rose by 15.5% to $83.6 million on a YoY basis. The below picture gives a broader idea of the company’s performance in 1HFY22:
Financial Summary (Source: Analysis by Kalkine Group)
Key Risks: The company’s operational and financial performance could be impacted by the uncertainties in relation to the pandemic. ART operates in a highly competitive market, which may impact its financial heath led by changing consumer sentiments.
Outlook: During 2HFY22, the company anticipates GMV in the range of $107-110 million, which has been upgraded from $105 million due to the current underlying GMV growth trajectory and clear outlook.
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 is trading close to its 52-week low level of $0.495, offering a decent opportunity for accumulation. The stock of ART has been corrected by ~14.39% 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 some discount to its peers, considering the negative ROE and mounting losses, etc. For the purpose of valuation, peers such as Seek Ltd (ASX: SEK), REA Group Ltd (ASX: REA), and Domain Holdings Australia Ltd (ASX: DHG) have been considered. Considering the expected upside in valuation, growing topline and gross profit, 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 $0.505, down by ~5.608% as on 14 April 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.
ART 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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