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Technology Stocks : KVH Industries, Inc.
KVHI 6.015+3.9%3:26 PM EDT
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To: nissan who wrote (7244)9/4/2022 7:05:53 PM
From: awecr2  Read Replies (2) of 7249
 
I’m curious if anyone else here believes KVH is likely to be acquired soon? From an investment perspective, they always implied that the inertial nav business was a call option on the future. Now that they have sold it and have implemented a poison pill, it seems pretty obvious that they are in the market to be sold and are looking for the highest bidder. The balance sheet looks great and they are looking at solid GAAP earnings with improving reoccurring revenue growth, moving forward. It’s worth noting that top line growth is stunted for this year, given the impact of the shutdown from the legacy arc light network. This implies accelerating revenue growth in 2023. A great time to get max dollar for a company to sell. Now that Martin KVH is gone, there really is nothing stopping them from acting in the best interest of shareholders.

Anyone have thoughts on what a proper target price would be? My range is $13 to $18 based on multiple valuation approaches. They range from simple 2022 non-GAAP EBITDA multiple to a multi-tiered analysis of EV/EBITDA, asset and earnings growth. The reasons I believe the price could settle above $15 and as high as $18 are obvious. Given that they have a debt free balance sheet and a growing 80% reoccurring revenue steam, a cost benefit analysis would imply a higher premium than a typical asset value approach.
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