Towards the end of the RCMT call, regarding growth in FY25, they stated that they target annual growth in adj EBITDA in the low double digits. Of course, they missed that target in FY24, but it does make the bar easier to get over next year. Nelson mentioned the factors that impacted Q4. Also, they don't see much impact from Doge cuts in federal spending. Most of their direct work for the Feds is doing subcontract work in the Aerospace sector. Any impacts would be indirect, i.e. large scale uncertainty.
They are also working on getting DSOs down from a higher level. A few of their late accounts were cleaned up in January. Goal is to get DSO < 80 days by end of 2025.
If they can show growth of 10% in eps in FY25, this might re-rate to a higher forward PE than right now. Its only trading at 7x TTM, and 6.4x forward PE. Could it get a 9x forward PE? That would put FV around 20. Its in the mid 14s right now.
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