Bigtincan Holdings Limited

BTH Details

Business Update: Bigtincan Holdings Limited (ASX: BTH) is a sales enablement automation company that provides platform include Bigtincan Learning Hub and intelligent automation solutions used for sales, marketing, learning, and manage sales training courses

FY21 Financial Performance:

• The company has continued its strong performance reflecting a 42% increase in revenue to $43.9 million in FY21, compared to ~$31 million in FY20.
• The company has reported an improvement in ARR to $53.1 million as of 30 June 2021, reflecting a CAGR of ~51% since FY18.
• The company has completed the acquisition of Vidinoti, VoiceVibes, ClearSlide and Agnitio during FY21.
• At the end of 30 June 2021, the company’s cash position stood at ~$56.3 million.

Revenue Trend (Source: Analysis by Kalkine Group)

Key Risks:

• Foreign Currency Risk- The company’s operations are exposed to the global market, due to which the company could face the foreign currency risk.
• Stiff Competition- The company is exposed to intense competition in the market, which is vulnerable to opportunity cost risk.

Outlook:

• The company is dedicated to the M&A team, systems for acquisition integration and further, it targets to win new customers and upselling existing customers.
• The company is investing in technology to support growth in digital and mobility that could positively impact the company's profitability.
• It anticipates FY22 pro forma revenue of over $109 million considering organic growth and acquisition of

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 company reported an increase in net loss in FY21 owing to increased marketing spend during the year. The stock of BTH is trading above its average 52-weeks' levels of $0.761-$1.561. The stock of BTH gave a positive return of ~64.95% in the past six months and a positive return of ~21.20% in the past one month. From the technical analysis front, the stock of BTH has a support level of ~$1.15 and a resistance level of ~$1.50. The stock has been valued using an EV/Sales multiple-based illustrative relative valuation method and arrived at a target price with a correction of high single-digit (in percentage terms). The company might trade at a slight premium to its peer average EV/Sales (NTM trading multiple), considering the strategic integration and substantial increase in the top line. For this purpose, we have taken peers such as Infomedia Ltd (ASX: IFM), LiveHire Ltd (ASX: LVH), Iress Ltd (ASX: IRE), to name a few. Considering the current trading levels and valuation, the recent rally in the stock price, the uncertainty led by COVID-19 impact, negative profitability and the key risks associated with the business, we suggest investors to book profit and give a 'Sell' rating on the stock at the current market price of $1.37, as on 8 September 2021, 9:50 AM (GMT+10), Sydney, Eastern Australia.

BTH 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 for 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.

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