By Pitt Street Research<\/p>\n
Sensera Limited ((SE1)) is an ASX-listed technology company with two distinct revenue pillars; Micro Devices (Micro Electro Mechanical Systems or MEMS) and location-aware wireless networked sensors and systems that comprise solutions for the Internet of Things (IoT).<\/span><\/span><\/span><\/p>\n Clients’ product roll out is driving growth of MEMS<\/span><\/span><\/span><\/strong><\/p>\n Rapidly advancing MEMS technology facilitates usage of MEMS devices across Industrial and Medical industries, in products such as pressure sensors, organ-on-a-chip (OoC) and electro-optic devices.<\/span><\/span><\/span><\/p>\n The global microfluidics market alone is predicted to grow at an 8-year CAGR of 18.7% to US$23.4bn in 2025. As OEM customers ramp up production, SE1 should be able to grow on the back of their commercial success. <\/span><\/span><\/span><\/p>\n Increasing recurring revenues to drive Nanotron’s growth<\/span><\/span><\/span><\/strong><\/p>\n SE1’s is shifting towards becoming a systems provider rather than just a component supplier. This is changing its revenue model and customers will be charged a recurring monthly fee rather than a one-time licencing fee and product sales.<\/p>\n The share of recurring revenue is expected to be in the range of 5% to 10% by the end of FY2020 and is anticipated to reach >50% over the next 3–5 years.<\/span><\/span><\/span><\/p>\n We believe a higher share of recurring revenue should lead to better predictability of revenues, and hence a higher valuation of the shares.<\/span><\/span><\/span><\/p>\n Valuation range of $0.50–0.58 per share<\/span><\/span><\/span><\/strong><\/p>\n We believe that as the company scales up operations and production, cuts back on R&D expenses and moves towards a recurring revenue stream, margins should expand significantly. <\/span><\/span><\/span><\/p>\n Our DCF-based valuation projects an intrinsic value of $0.50–0.58 per share.<\/span><\/span><\/span><\/p>\n Download the full report<\/strong><\/p>\n Yesterday the report above was released by Pitt Street Research for which FNArena is a partner in distribution. The full report can be accessed here:<\/p>\n https:\/\/www.fnarena.com\/index.php\/pitt-street-research\/SE1\/<\/a><\/p>\n Find out why FNArena subscribers like the service so much: "Your Feedback (Thank You)<\/a>" – Warning this story contains unashamedly positive feedback on the service provided.<\/em><\/p>\n