Best calls to action – Wednesday, 31 August

About the author:

Author name:

By Andrew Tang

Job title:

Analyst - Equity Strategy

Date posted:

31 August 2022, 6:30 AM

Sectors Covered:

Equity Strategy and Quant

Helloworld Travl Ltd (ASX:HLO) - Finally profitable

HLO's FY22 result beat expectations with the group returning to modest (EBITDA) profitability in the 4Q, despite the sale of the Corporate travel business. Cashflow and the balance sheet were also stronger than expected.

In a sign of confidence, HLO has rewarded shareholders with a 10cps final dividend. It also provided FY23 guidance which was well above consensus. Backing out its investment in CTD from its EV, HLO is materially undervalued, trading on a recovery year EV/EBITDA multiple of only 2.9x. Add maintained.

Read our full reports and latest price targets on ASX:HLO here.

Tyro Payments (ASX:TYR) - Pointing to a clear increase in operating leverage in FY23

TYR's FY22 Reported NPAT appeared below Bloomberg consensus (-A$29m versus -A$20m), but the result beat at EBITDA (A$10.5m versus A$8m consensus) while the mid-point of FY23 EBITDA guidance was ~+25% above consensus.

Our key result takeaway was the market had been waiting for TYR to give evidence of improving operating leverage, with FY23 EBITDA guidance of A$23m-29m (FY21 A$10.5m) particularly meeting that criteria.

We lift our TYR FY22F/FY23F EPS forecasts by >10% (off low bases).

Our price target is set at (login to view). ADD maintained. Our key result takeaway was the market had been waiting for TYR to give evidence of improving operating leverage, with FY23 EBITDA guidance of A$23m-29m (FY21 A$10.5m) particularly meeting that criteria.

Read our full reports and latest price targets on ASX:TYR here.

Healius (ASX:HLS) - Pieces coming together- "a platform for growth"

FY22 underlying results were broadly in line with expectations, with double-digit revenue growth and ongoing cost outs driving leverage and robust cash flow. Not surprising, COVID testing underpinned the result, while Imaging and Day Hospitals went backwards on COVID-impacted elective surgery restrictions, lockdowns and increased costs.

While COVID uncertainty continues to limit quantitative guidance, we believe well managed costs, ongoing efficiencies and growth initiatives, and strong B/S, not to mention some continued level of COVID testing and an eventual rebound in demand from the backlog in diagnosis and surgery, lays the groundwork for solid growth.

We adjust our FY23-24 forecasts and roll forward valuation multiples, with our DCF/SOTP target price increasing to (login to view). Add maintained.

Read our full reports and latest price targets on ASX:HLS here.

Generation Dev Group (ASX:GDG) - A clean performance

In our view, this was a pretty clean result (without any obvious surprises), and it represented a relatively solid performance overall. Management also noted FY23 has seen a good start to the year for Investment Bond (IB) sales, albeit outlook commentary was pretty broad as per usual.

We lift GDG FY22F/FY23F EPS by 10%-15% on a combination of higher IB and Lonsec earnings.

Our price target is set at (login to view). We continue to believe GDG is well positioned to execute a compound earnings growth story over time. ADD maintained.

Read our full reports and latest price targets on ASX:GDG here.

Find out more

You can find further detailed analysis of company results this reporting season by browsing our reporting season tag, and view a full list of upcoming results on our Reporting Season Calendar.

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Disclaimer: Analyst may own shares. The information contained in this report is provided to you by Morgans Financial Limited as general advice only, and is made without consideration of an individual's relevant personal circumstances. Morgans Financial Limited ABN 49 010 669 726, its related bodies corporate, directors and officers, employees, authorised representatives and agents (“Morgans”) do not accept any liability for any loss or damage arising from or in connection with any action taken or not taken on the basis of information contained in this report, or for any errors or omissions contained within. It is recommended that any persons who wish to act upon this report consult with their Morgans investment adviser before doing so.