A mediocre quarter at best! Not sure why the stock is up. Low valuations?
Company hardly grew Q-o-Q if you exclude the acquisitions. This is further aggravated by a drag on the margins at the consolidated level from KAI and Dataceutics. And, based on the conference call, this is most likely the new norm. This is just after a quarter when the management guided for USD400m revenue and 20% EBITDA margin for FY2020. They are nowhere close to reaching the milestone.
Now, the two acquisitions cost Take Solutions USD72m. They are expected to generate c.USD4m yearly EBITDA on a run rate basis. That’s a whopping 18x EV/EBITDA valuation proffered. Hopefully, they start to grow from here at a much higher rate than 6% as announced on the call.
The only good thing about the quarterly presentation is the mention from Everest group about Navitas as a contender in CRO product vendor space amongst the likes of IQVIA, Parexel, Oracle, etc.