ADACEL TECHNOLOGIES LIMITED (ADA)
Share Price Analysis and Chart

02/07/2024

1

Buy

$0.75

59.57%

Adacel Technologies's cloudy trading update advises its FAA contract, awarded in the June half, has been protested by another tenderer and FAA is re-evaluating that tenderer's revised proposal. A decision is due in early September but the company retains its FY24 earnings (EBITDA) and profit-before tax guidance range.

That's after including one-time restructuring, severances and legal and professional charges totalling -US$0.7m in FY24.

Bell Potter expects Adacel Technologies will retain the contract given it designed the systems and owns the IP, but downgrades its FY24 EBITDA and pre-tax profit forecasts to reflect the charges.

Price target falls -6% to 75c. Buy rating retained.

FORECAST
Bell Potter forecasts a full year FY24 dividend of 0.00 cents and EPS of minus -6.41 cents.
Bell Potter forecasts a full year FY25 dividend of 0.50 cents and EPS of 2.29 cents.

11/06/2024

2

Outperform

-

-

Taylor Collison considers the sell-off in Adacel Technologies shares an opportunity, despite the recent financial results being below expectations.

The broker's positive outlook is based on recently-signed five-year contracts with quality government or quasi-government entities, noting these have been previously performed by the company and therefore the margins can be reliably estimated.

The remote tower business is currently causing a drag on profits but this is expected to be rectified in the next 12 months. The broker believes the stock is significantly undervalued and retains an Outperform rating. No target is provided.

FORECAST
Taylor Collison forecasts a full year FY24 dividend of 0.00 cents and EPS of minus -3.81 cents.
Taylor Collison forecasts a full year FY25 dividend of 5.20 cents and EPS of 5.20 cents.