I am a huge fanboy of RPI (Raspberry Pi). Like all hobbyists, I own more than is strictly necessary. A Pi 0W sits by my bedside, acting as a clock, timer, git server and NAS. I have a Pi 3 sitting on my desk, which I'm using for testing purposes. I also own a few MCUs (microcomputers) which have RP2040 chips on them.
Let's look at a few ratios for the company. A pathfinder prospectus is available for the company, but you can find a brief P&L on ADVFN: https://uk.advfn.com/cmn/fbb/thread.php3?id=52845356 So you have a gander at that.
My stats are based on y/e/ Dec 2023 figures. The previous years come out fairly similar, so I'll keep things brief.
GPM (Gross profit margins) are about 25% ($66.0m/$265.8m), which is OK. It's not an exceptional figure. For that, I'd expect 50%.
OPM (Operating profit margin) are 14% (37.5m/265.8), which is really good. I tend to think an OPM of 15% demonstrates good profitability. So it's within touching distance of my liking. The GPM and OPM was higher than I expected, because I know that they sell their products priced aggressively low.
ROCE (Return on Capital Employed) is around 20%, which I view as excellent. Anything above 15% is a sound business in my view. I calculate ROCE by dividing the Operating profit (37.5m) over Total Assets less Current Liabilities (182.6) to get to that 20%. There are many ways that one can slice and dice ROCE figures, with everyone having their own take on the matter. Me, I like to keep things simple.
So these figures look really good to me. It's a good company, is my view.
Valuation-wise, it's not cheap, as you might expect. Profts after taxes were $31.8m, which equates to about £25.4m. The shares closed at 420p, there are 185.67m shares in issue, giving it a market cap of £779.81m. That gives it a valuation of 30.7X earnings (779.81/25.4). Pretty high, but remember that profits after tax have more than doubled over the last two years. Assuming that growth continues, the company could grow into its valuation soon enough.
The shares were issued at 280p on Monday. They are now 420p. It's been a popular issue!