AFT Pharmaceuticals

[Rawz]

AFT SP looks to have moved into an uptrend (based on limited TA knowledge). This combined with what I am expecting to be positive fundamental news flow off the back of their $300m revenue target should help the SP grind higher and higher.

Disc. hold.

[BlackPeter]

AFT SP looks to have moved into an uptrend (based on limited TA knowledge). This combined with what I am expecting to be positive fundamental news flow off the back of their $300m revenue target should help the SP grind higher and higher.

Disc. hold.

Hmm - yes, SP managed to get over MA50 and MA200 - and even went through MA400.

Could be a trend change or could be just onother of these blibs the SP had throughout the big downtrend since 2020.

I stopped a long time ago to follow them ... did they change their strategy to spread potentially good sounding data without revenue impact? You mention a revenue goal. More interesting would be - do they make money at a reasonable PE and is earnings growth visible? Their only economically interesting tablet used to be to put Aspirin plus Ibuprufen into one tablet. Obviously - every doctor and most other people know about that and get the same benefit by just prescribing / buying cheap aspirin plus cheap Ibuprofen instead of buying an expensive Maxigesic.   

Do they have anything which customers can't get much cheaper in the boxes next to theirs ...

[Basil]

Last 5 years eps have been 7,19,10,15 and 11cps according to invest directs website, (that track record of eps does not inspire me at all in the context of a FY25 PE of 26 times earnings).  Sales growth is one thing, eps growth is quite another.

Just as well the future is going to be so much different with average broker forecasts of 16, 20 and 25 cps in the next 3 years https://www.marketscreener.com/quote/stock/AFT-PHARMACEUTICALS-LIMIT-27329668/finances/

I wrote a detailed post recently wherein I stated my belief that 80-90% weight should be put on what a company has actually achieved in the last 5 years and 10-20% on what they say they're going to do in the future.    Brokers think its worth $3.80.    Best wishes to shareholders.  Its not for me.

[FatTed]

 

Do they have anything which customers can't get much cheaper in the boxes next to theirs ...
[/quote]

Many Hospital medications, although I cant find a list of them

[lorraina]

I like their products and the sector.Their Crystaderm first aid cream is excellent.
Yes I once held and sold because they did not achieve what they said they would do.
However, I have kept watching them, and after seeing their share price break through the resistance level ,I bought back in at $2.99 and $3.01 on Tuesday.
"This time it is different"...lol

[Rawz]

AFT have a very long track record of growing top line. 14% CAGR over the last 15 years. to achieve FY27 $300m revenue target they imply the growth is stepping up to 20% p.a.

cashflow/ EPS is of course most important but its impacted by one off milestone payments and R&D which they can tip as much as they want into. last year they spent 20% more than the previous. A lot of this investment is going to start paying off.

We have continued to invest for the long-term
significantly advancing our strategy to extend
our reach across multiple geographies and added
to our research and development (R&D) pipeline.
These efforts have come at the cost of short-term
earnings growth, but we are convinced they will
deliver growth in long term shareholder value.

AFT have been self funding for awhile now. No cap raises required and they are starting to pay divvys.

[winner (n)]

Rawz, love it when you get excited about a stock. Usually a good sign

The charts in your favour ...big impending uptrend for AFT just like the good ol days

You cannot view this attachment.

[Ferg]

10th consecutive first half revenue increase and improved profitability for AFT's 1st half:
https://www.nzx.com/announcements/462998

Highlights
• Half-year operating revenue rises 33% to $114.9 million
• EBITDA2 of $6.6 million
• Operating profit of $4.7 million up from prior period losses
• Net profit after tax of $2.7 million

[lorraina]

Pleasing seeing them do as they said they would.
AFT remains on track to deliver a FY 26 operating profit within the previously outlined range of $20 million to $24 million. The company also reiterates its confidence in its pathway to $300 million annual revenue in FY 27, supported by
the launch schedule, our licensing program, the scaling of international hubs and continued geographic expansion.

[lorraina]

https://hotcopper.com.au/asx/afp/corporate-spotlight/

[lorraina]

Hartley on HC again.
https://hotcopper.com.au/news/the-watchlist/153465/fridge-free-drugs-global-markets-how-aft-are-targeting-a-6-billion-opportunity/

From a broker's research.
....................2025A.................2026 E.................2027E...................2028E
EPS...............10.9.....................15.6......................20..........................20.75
EPS Growth.............43.7%...................28.2%.................37.5%........................Average eps growth 34.46%
Current PE ratio is 21.63 giving a PEG ratio of [21.63] Divided by [av growth] 34.46 of well under one at .627.
Market Screener.
EPS.............11...................15.84..........................19.4....................24.65.

[OnwardsNupwards]

the thing a lot of people might miss with AFT is just how much investment has been occurring.  ie, a lot of R&D, and a lot of investment (but probably opex) from starting up these new offices etc in many different countries. 

the company has ben achieving v good revenue growth - old products growing plus new product launches - and has a v good pipeline of opportunities (to sell more old products, with contributions from new and all supported by the R&D pipeline and contributions from new offices globally).

I'm a zulu principle follower/proponent, and think this is almost a zulu stock.  it is just that you have to look thru a lot of the investment and currently suppressed profits to see a more appropriate/satisfactory level of earnings and earnings growth. 

 the track record of growth (in revenue) is good, and the projections are bullish  ($200m then $300m) and are being maintained ... might we be on the cusp of seeing the growth in profits.  I think so.

[Basil]

OnwardsNupwards.  Welcome to the forum.  You could have a good point but maybe that's already factored into the share price ?

I prefer to take a wider lens than Lorriana has above and note the company started making money in 2020, 12 cps.  If they hit the average (note there's only 2 analysts covering it) eps forecast for FY28 of 24.95 cps over 8 years that's a CAGR in EPS of 9.58%.  Forward PE is 23 so I make the PEG ratio 2.4.

Using my standard GARP valuation value finding formula of no growth PE of 8.5 + 1 PE extra for each 1% CAGR growth that gives a suggested good value target of (8.5 + 9.58) x forward EPS of 15.62 = $2.82.

https://www.marketscreener.com/quote/stock/AFT-PHARMACEUTICALS-LIMIT-27329668/finances/

On visible earnings this screens well outside my good value GARP valuation criteria and I'm also noting the very low dividend yield so its probably not for me.

For others, the $64,000 question is, to what extent might earnings be currently suppressed through R&D and expansion costs that have to be expensed ?
Just out of curiosity, what percentage of their sales are Maxigesic, the effects of which can easily be replicated with a combination of two cheap generic brand products ?

[winner (n)]

Rawz from other place reminds us that they are going to build on their already very strong track record of growth (15 year revenue CAGR of 14%).

[lorraina]

I like their products and the sector.Their Crystaderm first aid cream is excellent.
Yes I once held and sold because they did not achieve what they said they would do.
However, I have kept watching them, and after seeing their share price break through the resistance level ,I bought back in at $2.99 and $3.01 on Tuesday.
"This time it is different"...lol

Well it certainly is different this time..lol.
Av buy price $3.00.Closed tonight at $3.72 ....up now a handsome 24% in 3 months and momentum is building...