Research notes

IPART has released a methodology paper outlining its proposed approach to calculating an Initial Asset Base (IAB), which has direct implications for the pricing of Electronic Lodgment Network Operators (ELNOs). While this is just a discussion paper, it certainly points to a likely more rigid structure controlling PXA’s future pricing, while elements such as the potential exclusion of goodwill from IPART's proposed IAB calculation could present downside risk. We make nominal changes to our PXA earnings of -1%-2% on some post results earnings tweaks. While it is too early to factor in the full implications of the pricing review, we now apply a 15% discount to our valuation to account for potential regulatory risk, setting our price target at A$14.31. We maintain our ACCUMULATE recommendation with >10% upside to our PT.

Microsoft is an American multinational technology company that develops and markets software, services and hardware. The company is best known for its software products, including Microsoft Windows operating systems, the Microsoft Office suite and the Internet Explorer web browser. Its five main operating segments include: Windows & Windows Live Division, Server and Tools, Online Services Division, Microsoft Business Division, and Entertainment and Devices Division.

Salesforce was founded in 1999 in San Francisco, California. It is the leading Customer Relationship Management (CRM) software provider and pioneered Software as a Service (SaaS). Salesforce’s pioneering SaaS model meant it was the first company to have all its software and customer data hosted on the internet and made available via monthly subscription.

Constellation Software (CSU) acquires, manages and builds industry specific software businesses aka Vertical Market Software (VMS) companies. Uniquely they are perpetual owners of all their businesses. CSU has six operating groups: Volaris, Harris, Jonas, Vela Software, Perseus Group and Topicus, which service customers in over 100 markets worldwide. Each operating group serves as a holding company for dozens of underlying software companies. The company is headquartered in Toronto, Canada, and has offices in North America, Europe, Australia, South America and Africa.

NVIDIA Corporation is an American semiconductor company and a global manufacturer of high-end graphics processing units (GPUs). The company is based in California and has five operating segments: (1) Data Center, (2) Gaming, (3) Professional Visualisation, (4) Automotive, and (5) Original Equipment Manufacturer (OEM). As the engine of Artificial Intelligence (AI), NVIDIA is committed to accelerating the growth of generative AI, by recognising it as a new computing platform, like the PC, internet and mobile-cloud.

NGI has acquired Georgian, a Toronto-based AI-focused growth equity firm. This deal appears to be a strategic fit for NGI, meeting its flagged acquisition criteria and being earnings accretive. We forecast NGI FY26F/FY27F/FY28F EPS to increase by ~1%-3% following the transaction. However, our target price reduces to A$2.98 (from A$3.35), reflecting a meaningful contraction in global peer trading multiples and our application of a more conservative valuation multiple to NGI (12.5x PE versus 15x previously). NGI's recent sell-off appears to be mainly tied to Private Credit concerns around its key strategic partner Blue Owl. We think NGI's fundamentals are largely unchanged, and current market volatility is arguably conducive to its stable of alternative asset fund managers. We rate NGI a Buy.

Global Business Travel Group (AMEX GBT) is the world’s leading B2B travel platform, providing software and services to manage travel, expenses, and meetings and events for companies of all sizes. It operates in more than 140 countries.

Amplitude’s share price suffered a brutal selloff after announcing it was now 0-for-2 in its ECSP exploration program. Isabella well flowed gas to surface but failed to maintain pressure and flow, disappointing given Isabella was the largest resource target in the program. The balance sheet and A$100m H1 EBITDAX buy time, but with two wells left and FID deferred, the next spud is effectively a must-win for the growth thesis. We retain our BUY rating with a revised A$3.00 target price, but the risk equation has shifted. Priced as an ex-growth cash cow, but still sensitive to well results.