Fatpipe Inc/UT (NASDAQ: FATN)

Sector: Technology Industry: Software - Infrastructure CIK: 0001993400
Market Cap 30.21 Mn
P/B 1.44
P/E 70.67
P/S 2.04
ROIC (Qtr) 3.89
Div Yield % 0.00
Rev 1y % (Qtr) -29.24
Total Debt (Qtr) 6.05 Mn
Debt/Equity (Qtr) 0.29

About

Price action

Investment thesis

Bull case

  • Healthy cash reserves of 6.23M provide 6.47x coverage of short-term debt 962393, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of (408718) provides exceptional 30.24x coverage of minority interest expenses (13514), showing strong core operations.
  • Strong tangible asset base of 31.38M provides 5.19x coverage of total debt 6.05M, indicating robust asset backing and low credit risk.
  • Tangible assets of 31.38M provide exceptional 28.51x coverage of deferred revenue 1.10M, showing strong service capability backing.
  • Retained earnings of 11.80M provide full 2.32x coverage of long-term debt 5.09M, indicating strong internal capital position.

Bear case

  • Investment activities of (42981) provide weak support for R&D spending of 1.89M, which is -0.02x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating cash flow of (408718) provides insufficient coverage of deferred revenue obligations of 1.10M, which is -0.37x, raising concerns about future service delivery capabilities.
  • The company's operating cash flow of (408718) shows concerning coverage of stock compensation expenses of 625220, with a -0.65 ratio indicating potential earnings quality issues.
  • High receivables of 9.82M relative to inventory of 328736 (29.86 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • Free cash flow of (448699) provides weak coverage of capital expenditures of 39981, with a -11.22 ratio suggesting additional external financing needs for growth initiatives.

Peer comparison

Companies in the Software - Infrastructure
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 MSFT Microsoft Corp 3,563.59 Bn 33.97 12.13 60.56 Bn
2 ORCL Oracle Corp 561.87 Bn 36.43 9.21 124.39 Bn
3 PLTR Palantir Technologies Inc. 413.65 Bn 377.64 106.17 0.24 Bn
4 PANW Palo Alto Networks Inc 126.45 Bn 113.19 13.23 0.35 Bn
5 CRWD CrowdStrike Holdings, Inc. 116.42 Bn -370.56 25.50 0.82 Bn
6 SNPS Synopsys Inc 86.06 Bn 64.60 12.20 14.29 Bn
7 NET Cloudflare, Inc. 62.78 Bn -609.27 31.18 3.50 Bn
8 FTNT Fortinet, Inc. 60.83 Bn 32.47 9.28 1.00 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.95 2.69
EV to Cash from Ops. EV/CFO -74.90 28.91
EV to Debt EV to Debt 5.06 19.83
EV to EBIT EV/EBIT 19.09 -9.95
EV to EBITDA EV/EBITDA 16.77 6.82
EV to Free Cash Flow [EV/FCF] EV/FCF -68.23 26.09
EV to Market Cap EV to Market Cap 1.01 0.36
EV to Revenue EV/Rev 2.06 -9.34
Price to Book Value [P/B] P/B 1.44 3.88
Price to Earnings [P/E] P/E 70.67 -10.66
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -0.30
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 2.71
Dividend per Basic Share Div per Share (Qtr) 0.00 0.10
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 1.68
Interest Coverage Int. cover (Qtr) 4.54 -14.20
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -625.86 -408.01
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 636.42 226.39
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 -0.28
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -89.89 25.27
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -74.79 47.48
EBIT Growth (1y) % EBIT 1y % (Qtr) -76.45 20.13
EBT Growth (1y) % EBT 1y % (Qtr) -80.67 14.16
EPS Growth (1y) % EPS 1y % (Qtr) -92.50 67.50
FCF Growth (1y) % FCF 1y % (Qtr) -2,034.88 296.60
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -21.86 46.75
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.46 0.67
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.01
Cash Ratio Cash Ratio (Qtr) 1.03 1.22
Current Ratio Curr Ratio (Qtr) 2.74 2.59
Debt to Equity Ratio Debt/Equity (Qtr) 0.29 -0.96
Interest Cover Ratio Int Coverage (Qtr) 4.54 -14.20
Times Interest Earned Times Interest Earned (Qtr) 4.54 -14.20
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 14.00 -548.16
EBIT Margin % EBIT Margin % (Qtr) 10.81 -199.84
EBT Margin % EBT Margin % (Qtr) 8.43 -607.20
Gross Margin % Gross Margin % (Qtr) 92.70 51.88
Net Profit Margin % Net Margin % (Qtr) 2.90 -610.00