Abaxx Technologies (NEOE:ABXX) valuation after new UK onshore wind futures launch and CFTC review anticipation

Abaxx Technologies (NEOE:ABXX) just announced a new United Kingdom Onshore Wind futures contract on its Abaxx Exchange platform, giving investors fresh insight into how the market is valuing its weather risk toolkit.

See our latest analysis for Abaxx Technologies.

The latest contract launch lands at a time when sentiment is already shifting fast, with Abaxx delivering a 61.93% 3 month share price return and a striking 324.25% 1 year total shareholder return. This suggests momentum is firmly building around its growth story.

If this kind of move has your attention, it could be a good moment to explore fast growing stocks with high insider ownership for other fast moving ideas with strong insider conviction.

Yet with Abaxx still lossmaking but trading at a steep discount to analyst estimates, investors now have to decide whether this explosive momentum signals a genuine value disconnect or whether the market is already pricing in years of future growth.

Price to Book of 33.9x: Is it justified?

Abaxx trades at CA$46.88 with a price to book ratio of 33.9 times, signalling a rich valuation versus both its sector and closest peers.

The price to book multiple compares the company’s market value to its net assets. It is a common yardstick for asset light, growth focused software businesses where tangible book value is small. For Abaxx, this means investors are paying a hefty premium for each dollar of net assets, implying strong confidence in future growth and the value of its exchange and software platforms.

That confidence sits alongside our SWS DCF model, which estimates a fair value of CA$214 per share. This indicates the current share price trades at a steep discount to this intrinsic value calculation. While the DCF suggests the market could be underestimating long term cash flow potential, the stretched price to book ratio shows investors are already willing to pay far above the sector norm for Abaxx’s balance sheet today.

Compared to the wider Canadian Software industry average price to book ratio of 3.3 times and a peer average of just 1.7 times, Abaxx’s 33.9 times multiple looks extreme. This underscores how aggressively the market is valuing its future prospects relative to both the sector and similar companies.

See what the numbers say about this price — find out in our valuation breakdown.

Result: Price to Book of 33.9x (OVERVALUED)

However, Abaxx remains deeply lossmaking and heavily reliant on rapid revenue growth, so any slowdown or regulatory setbacks could quickly puncture this momentum-driven valuation.

Find out about the key risks to this Abaxx Technologies narrative.

Another Take on Value

While Abaxx looks expensive on a price to book basis, our DCF model paints a very different picture. It suggests the shares are trading well below fair value at CA$214. If the cash flows materialise, today’s premium to book could still leave meaningful upside on the table, or is the model too optimistic about scale and margins?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Abaxx Technologies for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 901 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Abaxx Technologies Narrative

If you see the story differently or simply want to test your own assumptions, you can quickly build a personalised view in just minutes with Do it your way.

A great starting point for your Abaxx Technologies research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

Ready for more investment ideas?

If you want a real edge, do not stop at Abaxx, use our powerful screeners to uncover targeted opportunities before the crowd catches on.

• Capture bargain potential by targeting mispriced businesses using these 901 undervalued stocks based on cash flows that put cash flow strength front and center.
• Position yourself ahead of the next tech wave by focusing on innovation packed names highlighted in these 26 AI penny stocks.
• Strengthen your income stream with reliable payers by hunting through these 13 dividend stocks with yields > 3% offering attractive yields above 3%.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com