A key point the research report makes is below: "We generate a...

A key point the research report makes is below:

"We generate a price target of $0.030/share which is an 18% premium to market price. However, we note that the model is sensitive to changes in EBITDA and cash opex margin. A 1% change in either margin changes the valuation ~5%"

They have gone off forecast revenue of $18.6m and EBITDA of $3.8m, giving an EBITDA margin of 20%.

However, management's (conservative) forecast was for revenue of $20.1m and EBITDA of $5.75m, giving a margin of 28.6%.

Therefore, using the analysts numbers, had they not reduced an already conservative forecast by management for FY2018 the share price should be another 43% (28.6%-20%  x $0.030) above the target. This would move it from $0.030 to $0.0429...

The report borders on ridiculously conservative... I personally, believe STL will be closer to $8m EBITDA for the year, but, would still be content on the $5.8m (again, conservatively) estimated by management.

The report has 2020 FY with an EBITDA of $5.7m even, below management's forecast for 2018!!!!!

PAC Partners have really allowed for bugger all growth...