The company has won a contract with Emergency Services and State Super to provide a full back-office service. Morgans observes a shift from being a software supplier to a full service provider significantly expands the company’s revenue opportunity.
Morgans revises forecasts to incorporate licence revenues from ESSS from FY21. The broker assumes 40% of licence revenues are converted into operating earnings (EBITDA).
Add rating maintained. Target rises to $15.33 from $15.00.
Sector: Software & Services.
Target price is $15.33.Current Price is $12.18. Difference: $3.15 – (brackets indicate current price is over target). If IRE meets the Morgans target it will return approximately 21% (excluding dividends, fees and charges – negative figures indicate an expected loss).