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Global Axcess Corp. Message Board

  • longtimefollower longtimefollower Aug 12, 2009 7:13 PM Flag

    How should GAXC be valued?

    GAXC is, by far, the best performing of the 3 publicly traded companies in this business...the other 2 being Cardtronics (CATM) and Access to Money (AEMI). And yet, by most stats, GAXC is the LEAST EXPENSIVE. That doesn't make sense! Either CATM and AEMI are overvalued, or GAXC is undervalued. Let's take a closer look (all stats from Yahoo:

    TRAILING 12 MONTH REVENUES
    GAXC $22 M
    CATM $485 M
    AEMI $32 M

    PRICE/SALES
    GAXC .60
    CATM .56
    AEMI .22

    EV/EBITDA
    GAXC 4.23
    CATM 6.85
    AEMI 5.2

    PRICE/BOOK
    GAXC .95
    CATM negative
    AEMI negative

    TOTAL DEBT/EBITDA
    GAXC 1.6 to 1
    CATM 3.5 to 1
    AEMI 5.0 to 1

    OPERATING MARGIN
    GAXC 11.5%
    CATM 6.1%
    AEMI .65%

    GROSS MARGIN
    GAXC 45.2%
    CATM 26.4%
    AEMI 44.6%

    Notice how:

    1) CATM and AEMI are much more BURDENSOMELY leveraged, compared to GAXC.

    2) CATM and AEMI have negative book values....but GAXC's is positive.

    3) GAXC has the highest operating and gross margins.

    4) It's no surprise that GAXC's p/s ratio is no more attractive than CATM's or AEMI's. Because GAXC has LESS DEBT. (In fact, it is ONE THIRD as leveraged as AEMI...comparing debt to ebitda.)

    5) GAXC has the lowest EV/EBITA ratio, and yet, owing to its "best in class" operating performance, it should, IMHO, have the HIGHEST. What is PARTICULARLY impressive is that GAXC is the SMALLEST of the 3 players, on an annual revenues base. As a result, it should be harder (because of higher fixed costs) for GAXC to achieve the kind of economies of scale that a CATM should be able to. And yet, here we have, in GAXC, the smallest player of the 3 earning the best returns!

    The conclusion is that GAXC should trade for at LEAST AEMI's EV/Ebitda ratio, and arguably for as high as CATM's EV/EBITDA ratio. Adjusting accordingly, one could reasonably argue that GAXC's valuation, in comparision to AEMI and CATM, justifies a price somewhere between 74 cents and 97 cents RIGHT NOW!

 
GAXCQ
0.00090.0000(0.00%)Aug 12 9:31 AMEDT

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