Tyro Payments Limited

TYR Details

A Look at TYR’s 1HFY21 Key Results: Tyro Payments Limited (ASX: TYR) is a provider of payments solutions, business loans and banking products to Australian businesses. As on 23 February 2021, the market capitalisation of the company stood at ~$1.54 billion. During 1H21, the company reported a 9.5% increase in transaction value to $12.1 billion and an increase of 13.2% in merchants to 36,720. In the same time span, revenue of the company went down by 2.1% to $114.8 million and gross profit increased by 21.6% to $61.2 million. EBITDA margin for the period expanded to 13.8% from 3% on a year over year basis. Total deposits came in at $104.0 million as at 31 December 2020, up from $39.7 million as at 31 December 2019. Despite the continuing challenges from COVID-19, the company witnessed robust merchants’ growth in 1HFY21. Further, the company’s market leading solutions continued to draw new merchants to its platform. TYR remains in a decent financial position with lease liabilities amounting to ~$5.2 million and cash balance of $130.1 million at the end of 1HFY21. Net cash flow from operating activities came in at $56.6 million, against cash outflow of $12.2 million reported in 1HFY20.

Key Highlights (Source: Company Reports)

Outlook: The company remains on track to focus on assisting their merchants in recovering their business, going forward. TYR is also building an ecosystem centered around payments, by introducing value-adding features and products designed to attract new merchants and retain exiting merchants.

Valuation Methodology: EV/Sales Multiple Based Relative Valuation (Illustrative) 

Data Source: Refinitiv, Thomson Reuters, 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: Currently, the stock is trading above the average of its 52-week’s high and low level of $4.4 and $0.97, respectively. The stock of the company went up ~20.1% in the past one month. On a technical analysis front, the stock has a support level of ~$2.784 and a resistance level of ~$3.396. We have valued the stock using an EV/Sales multiple based illustrative relative valuation method and arrived at a target price of low double-digit upside (in % terms). We believe that the company can trade at a slight premium as compared to its peer median, considering its market leading solutions, decent 1HFY21 key numbers, increased transactional value, higher merchants, and stable balance sheet. For the purpose, we have taken the peer group - Sezzle Inc (ASX: SZL), EML Payments Ltd (ASX: EML), to name few. Considering decent financial performance, robust merchant base, decent liquidity postion, valuation, and positive outlook, we recommend a “Hold” rating on the stock at the current market price of $2.98, down by ~1.974% as on 23 February 2021.

TYR Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

intelliHR Limited

IHR Details

1HFY21 Key Results Highlights: intelliHR Limited (ASX: IHR) is engaged in the development and marketing of next-generation cloud-based people management & data analytics platform. Recently, the company announced that it has appointed Ilona Charles as a non-executive Director of the company, which was effective from 19 February 2021. In 1HFY21, revenues from ordinary activities increased a whopping 138% year over year and came in at $1.3 million. During the period, contracted annual recurring revenue increased 82% year over year and came in at $919,000. Also, the same increased a whopping 47% on 2H20. The growth was primarily driven by market expansion in North American and UK, with 7 new customer contract wins in those territories. As at 31 December 2020, contracted subscribers came in at 29,170, up from 147% on a year over year basis and 101% on 2H20. Invoiced revenue skyrocketed 81% year over year, with annualised invoiced revenue of $2,595,855as at 31 December 2020.

During the period, the company won three successful enterprise contract which delivered an increase of 288% on pcp in new subscribers per account in 1HFY21. Net cash used from operations in 1HFY21, down 20% from the prior corresponding period.  The company ended the period with cash balance of $1.96 million.

Key Highlights (Source: Company Reports)

Outlook: For 2HFY21, the company remains on track to expand its international operations specifically in the Americas and UK markets, owing to the recovery in the global economy. The company also plans to build a ‘best of breed’ marketplace ecosystem in 2HFY21 with continuous investments in R&D to maintain its market-leading position.

Stock Recommendation: The stock of IHR gave a positive return of ~100% during the span of three months and ~86.9% in the past six months period. The stock of the company is currently trading close to its 52-weeks high level of $0.59. Debt to equity ratio of the company stood at 0.67x in FY20 as compared to the industry median of 0.05x. On a technical front, the stock of IHR has a support level of ~$0.385 and a resistance level of ~$0.47. On the valuation front, the stock is trading at a P/BV multiple of 16.8x as compared to the industry median of 6.7x on TTM (Trailing Twelve Months) basis and thus seems overvalued. Considering the aforesaid facts, spike in the stock price over the past months, current trading levels, and high debt to equity ratio, we are of the view that most of the positive factors of the company have been discounted at current trading levels. Hence, we suggest investors to wait for better entry level and give an “Expensive” rating on the stock at the closing price of $0.44, down by 5.377% on 23 February 2021.

IHR Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

Disclaimer  

The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as personalised advice.