#SMRT is being hit today after the trading statement with lots of low volume trades earlier on. It has corrected the toppy rally after the recent bullish media tips.
The revenue looks short due to the A+K impact, but I don’t think anyone invests in #SMRT for this lumpy business. Key growth in SwipedOn and Space Connect was achieved, with Group ARR +51% YoY in line with my expectations.
This is where the potential lies, particularly now that SwipedOn Desks is fully operational and new partnerships have been signed for Space Connect. #SMRT
A high GM SaaS business growing 50%+ easily gets a 10x multiple on ARR. Churn also reasonable at annualised 8.4% of revenue (noting unsurprising higher customer churn in lower value plans). This is in line with the ventures deals we get across our desk. #SMRT
A 10x ARR multiple assuming matched 6-month growth in H2 is a £49m valuation. I think this is conservative given there were still some lockdown restrictions in H1. In support of this, Canaccord reiterated a buy at 220p today, or £64m. #SMRT
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