Q: Hi 5i,
Would appreciate your thoughts on DND fourth quarter results? Specifically, their progress towards debt reduction and the upside vs downside risk from the current valuation.
Thank you,
Greg C.
Would appreciate your thoughts on DND fourth quarter results? Specifically, their progress towards debt reduction and the upside vs downside risk from the current valuation.
Thank you,
Greg C.
5i Research Answer:
EPS of ($1.57) widely missed estimates of ($0.0875) and revenues of $120.11M beat estimates of $118.01M. Sales grew 15% and its Adjusted EBITDA grew 5%. Management noted strong ARR growth and solid free cash flow, and organic growth was decent at 8%. The industry it operates in saw a challenging market over the past few years, but with rates declining, we could see some tailwinds for the name. These were decent results, but it is still unprofitable and has a high debt balance. We think there is some possibility for a recovery in the name, but its debt reduction progress is slow, and we would like to see its margins improve.