The company has announced $13m in new and retained revenue in...

The company has announced $13m in new and retained revenue in the first half. The average contract term would be around 2 years, so they have already increased their annual turnover by around 10% organically in 6 months. If they do this in the second half they will grow by 20% plus per annum without acquisitions. This is also not taking into account the new high speed national data network, which is a huge opportunity to up sell. They have 26 sales staff around the country, who so far look to be doing a tremendous job.

This company is still very under the radar.

With organic growth like this and a likely acquisition and more synergies from the recent acquisitions to flow through, the future is looking very bright.

So looking forward to next years earnings, we can do some rough estimates. Last quarter they did $14.25m in revenue. Multiply this by 4 and you get $57m and then add on 20% growth and we get $68.4m. They have stated that EBITDA margins will revert to over 7%, so that equates to $4.8m EBITDA conservatively. So the industry average for these businesses is around 13 x EBITDA, which would equal a market cap of $62m or a share price of $1.2. As 5gn is growing faster than a lot of their piers they may command a higher earnings multiple. Thats their current run rate without any acquisitions, which are almost certainly likely to come through in the next 3-6 months.

I own and these are just my thoughts, so DYOR.