Tesserent (ASX:TNT) - Share price, News & Analysis

Q: What is the Fair Price of TNT when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

TNT (A$0.11) is trading below our estimate of [[fair value]] (A$0.33)

TNT fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	5/6
Past Performance	0/6
Financial Health	4/6
Dividends	0/6

TNT Stock Overview

Tesserent Limited provides cyber security consulting, cloud, and managed services in Australia and internationally.

Rewards

Trading at 66.7% below our estimate of its fair value

Earnings are forecast to grow 96.94% per year

Risk Analysis

Shareholders have been diluted in the past year

Does not have a meaningful market cap (A$138M)

Tesserent Competitors

Family Zone Cyber Safety

ASX:FZO

AU$277.7m

archTIS

ASX:AR9

AU$35.6m

Prophecy International Holdings

ASX:PRO

AU$59.6m

K2fly

ASX:K2F

AU$27.7m

Price History & Performance

Summary of all time highs, changes and price drops for Tesserent
Historical stock prices
Current Share Price	AU$0.11
52 Week High	AU$0.33
52 Week Low	AU$0.10
Beta	0.55
1 Month Change	-18.52%
3 Month Change	-35.29%
1 Year Change	-56.00%
3 Year Change	150.00%
5 Year Change	25.00%
Change since IPO	-55.10%

Recent News & Updates

Apr 29

We Think Tesserent (ASX:TNT) Can Stay On Top Of Its Debt

Legendary fund manager Li Lu (who Charlie Munger backed) once said, 'The biggest investment risk is not the volatility...

Shareholder Returns

	TNT	AU Software	AU Market
7D	-4.3%	-3.2%	-0.5%
1Y	-56.0%	-26.4%	-12.2%

Return vs Industry: TNT underperformed the Australian Software industry which returned -26.4% over the past year.

Return vs Market: TNT underperformed the Australian Market which returned -12.2% over the past year.

Price Volatility

Is TNT's price volatile compared to industry and market?
TNT volatility
TNT Average Weekly Movement	10.1%
Software Industry Average Movement	11.4%
Market Average Movement	9.9%
10% most volatile stocks in AU Market	16.6%
10% least volatile stocks in AU Market	4.4%

Stable Share Price: TNT is not significantly more volatile than the rest of Australian stocks over the past 3 months, typically moving +/- 10% a week.

Volatility Over Time: TNT's weekly volatility (10%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2015	305	Kurt Hansen	https://tesserent.com

Tesserent Limited provides cyber security consulting, cloud, and managed services in Australia and internationally. The company operates through three segments: Tesserent Commercial, Tesserent Federal, and Tesserent New Zealand. Its services include cyber strategy and consulting; security advisory; technical assurance and testing, including penetration testing, application security, and threat intelligence services; and identity and access management.

Tesserent Fundamentals Summary

How do Tesserent's earnings and revenue compare to its market cap?
TNT fundamental statistics
Market Cap	AU$138.40m
Earnings (TTM)	-AU$1.83m
Revenue (TTM)	AU$82.39m

1.7x

P/S Ratio

-75.9x

P/E Ratio

Is TNT overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
TNT income statement (TTM)
Revenue	AU$82.39m
Cost of Revenue	AU$18.60m
Gross Profit	AU$63.80m
Other Expenses	AU$65.62m
Earnings	-AU$1.83m

Last Reported Earnings

Dec 31, 2021

Next Earnings Date

n/a

Earnings per share (EPS)	-0.0014
Gross Margin	77.43%
Net Profit Margin	-2.22%
Debt/Equity Ratio	21.9%

How did TNT perform over the long term?

See historical performance and comparison

We’ve recently updated our valuation analysis.

Valuation

Is TNT undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Price-To-Sales vs Peers
Price-To-Sales vs Industry
Price-To-Sales vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for TNT?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for TNT. This is calculated by dividing TNT's market cap by their current preferred multiple.
What is TNT's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	AU$138.40m

TNT key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	1.9x
Enterprise Value/EBITDA	22.6x
PEG Ratio	n/a

Price to Sales Ratio vs Peers

How does TNT's PS Ratio compare to its peers?

TNT PS Ratio vs Peers

The above table shows the PS ratio for TNT vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PS	Estimated Growth	Market Cap
Peer Average	6.5x
FZO Family Zone Cyber Safety	12.3x	30.3%	AU$277.7m
AR9 archTIS	6x	n/a	AU$35.6m
PRO Prophecy International Holdings	4.2x	n/a	AU$59.6m
K2F K2fly	3.4x	32.6%	AU$27.7m
TNT Tesserent	1.7x	25.9%	AU$138.4m

Forward PS

Price-To-Sales vs Peers: TNT is good value based on its Price-To-Sales Ratio (1.7x) compared to the peer average (6.5x).

Price to Earnings Ratio vs Industry

How does TNT's PE Ratio compare vs other companies in the AU Software Industry?

Price-To-Sales vs Industry: TNT is good value based on its Price-To-Sales Ratio (1.7x) compared to the Australian Software industry average (4.2x)

Price to Sales Ratio vs Fair Ratio

What is TNT's PS Ratio compared to its Fair PS Ratio? This is the expected PS Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

TNT PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio	1.7x
Fair PS Ratio	7.5x

Price-To-Sales vs Fair Ratio: TNT is good value based on its Price-To-Sales Ratio (1.7x) compared to the estimated Fair Price-To-Sales Ratio (7.5x).

Share Price vs Fair Value

What is the Fair Price of TNT when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: TNT (A$0.11) is trading below our estimate of fair value (A$0.33)

Significantly Below Fair Value: TNT is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate TNT's PEG Ratio to determine if it is good value.

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Future Growth

How is Tesserent forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

Future Growth Score

5/6

Future Growth Score 5/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

96.9%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: TNT is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (1.8%).

Earnings vs Market: TNT is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: TNT is expected to become profitable in the next 3 years.

Revenue vs Market: TNT's revenue (25.9% per year) is forecast to grow faster than the Australian market (5.2% per year).

High Growth Revenue: TNT's revenue (25.9% per year) is forecast to grow faster than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: TNT's Return on Equity is forecast to be low in 3 years time (9.7%).

Discover growth companies

Past Performance

How has Tesserent performed over the past 5 years?

Past Performance Score

0/6

Past Performance Score 0/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-15.5%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: TNT is currently unprofitable.

Growing Profit Margin: TNT is currently unprofitable.

Past Earnings Growth Analysis

Earnings Trend: TNT is unprofitable, and losses have increased over the past 5 years at a rate of 15.5% per year.

Accelerating Growth: Unable to compare TNT's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: TNT is unprofitable, making it difficult to compare its past year earnings growth to the Software industry (21.2%).

Return on Equity

High ROE: TNT has a negative Return on Equity (-1.51%), as it is currently unprofitable.

Discover strong past performing companies

Financial Health

How is Tesserent's financial position?

Financial Health Score

4/6

Financial Health Score 4/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Stable Cash Runway
Forecast Cash Runway

Financial Position Analysis

Short Term Liabilities: TNT's short term assets (A$55.9M) do not cover its short term liabilities (A$70.6M).

Long Term Liabilities: TNT's short term assets (A$55.9M) exceed its long term liabilities (A$41.3M).

Debt to Equity History and Analysis

Debt Level: TNT's net debt to equity ratio (9.9%) is considered satisfactory.

Reducing Debt: Insufficient data to determine if TNT's debt to equity ratio has reduced over the past 5 years.

Balance Sheet

Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: Whilst unprofitable TNT has sufficient cash runway for more than 3 years if it maintains its current positive free cash flow level.

Forecast Cash Runway: TNT is unprofitable but has sufficient cash runway for more than 3 years, due to free cash flow being positive and growing by 13.7% per year.

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Dividend

What is Tesserent current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

Dividend Yield vs Market

Notable Dividend: Unable to evaluate TNT's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate TNT's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.

Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if TNT's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if TNT's dividend payments have been increasing.

Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as TNT has not reported any payouts.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

0.8yrs

Average management tenure

CEO

Kurt Hansen

no data

Tenure

AU$476,190

Compensation

Mr. Kurt Hansen, Grad. Dip. Engg, serves as Chief Executive Officer since 2021 and also serves as its Executive Director since December 12, 2019 and served as its Co-Chief Executive Officer since March 202...

CEO Compensation Analysis

Compensation vs Market: Kurt's total compensation ($USD323.24K) is about average for companies of similar size in the Australian market ($USD286.43K).

Compensation vs Earnings: Kurt's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: TNT's management team is not considered experienced ( 0.8 years average tenure), which suggests a new team.

Board Members

Experienced Board: TNT's board of directors are not considered experienced ( 2.5 years average tenure), which suggests a new board.

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: TNT insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 18.4%.

Data	Last Updated (UTC time)
Company Analysis	2022/07/03 00:00
End of Day Share Price	2022/07/01 00:00
Earnings	2021/12/31
Annual Earnings	2021/06/30