SenSen Networks (ASX: SNS)

Last close As at 17/05/2024

AUD0.03

0.00 (13.64%)

Market capitalisation

AUD20m

SenSen Networks is an Australian live awareness company with a global presence. Its SenDISA platform uses AI to provide real-time insights across cities, retail and gaming, where its versatility provides opportunities across verticals and geographies.

Equity Proposition

SenSen Networks (ASX: SNS) specialises in AI sensor and vision analytics, serving global government and enterprise customers. The company’s SenDISA platform fuses data from networks of cameras, sensors and other digital data sources to deliver real-time awareness capabilities. These insights boost productivity, enhance safety and reduce costs for the group’s customers. Listed on the Australian Securities Exchange, SenSen is capitalised at A$19m and operates across North America, Asia, Australia and New Zealand.

There are five key reasons why SenSen represents an exciting investment case.

  • First, SenSen’s blue chip, largely government customer base generates stable, long-term contracts with minimal bad debt and low churn. Each contract has strong potential to expand over time.
  • Second, SenSen has demonstrated global relevance, with a customer footprint which spans Australia, New Zealand, Canada, USA and Asia. The group’s established partner network in these regions bolsters its global reach.
    North America is a key strategic focus, with a view of opening a market many times the size of Australia. SenSen has a growing customer base in Canada and has secured key partnerships wins in the US with over 90 government and enterprise customers.
  • Third, SenSen’s SenDISA platform can be deployed across a wide range of applications, enlarging the company’s addressable market and supporting upsells with existing clients.
    SenDISA is already deployed in a variety of smart cities use cases, including smart parking, heavy vehicle monitoring, theft prevention and infrastructure audits, with scope to expand into other areas including mining, logistics and defence.
    SenSen operates in the vast global computer vision AI market, which is expected to reach US$207bn by 2030 growing at a CAGR of 39.6% from 2021 to 2030. The edge AI market is also projected to grow rapidly at a CAGR of 20.8%, reaching US$39.61bn by 2032 according to market estimates.
  • Fourth, following cost reductions implemented in FY23 and H124, the group generated positive operating cash flows for the first time in its history in H1, and we expect this trend to continue, with our forecasts showing sustainable cash flow positivity.
    SenSen has an operationally geared business model. A programme to reduce annual costs by a further A$2m supports our expectation of margin expansion and cash generation from here.
  • Finally, SenSen’s current valuation fails to properly reflect its strong upsell track record in our opinion, limited churn and status as one of the only companies among its peers forecast to reach EBITDA profitability in FY24 per consensus. Further smart city wins, particularly in the US, would be a key lead indicator of SenSen’s ability to deliver on the smart cities opportunity and drive a re-rating upwards.

In summary, SenSen offers exposure to a business with differentiated edge AI platform technology for vision analytics. The total addressable market for the company’s solutions is large and SenSen is gaining traction across a wide range of use cases and geographical markets. Now established in the substantial North American market and with cost reductions realised, the group looks well positioned for strong operationally geared growth.

Latest Insights

View More

TMT | Update

SenSen Networks — Time to scale

TMT | edison tv

SenSen Networks – executive interview

Digital signals flying over highway. Digital transformation. Internet of Things.

Sector

TMT

Equity Analyst

Dan Ridsdale

Head of Technology

Key Management

  • Christian Stevens

    CFO

  • David Smith

    Executive director and COO

  • Subhash Challa

    CEO

Balance Sheet

Forecast net debt (A$m)

0.7

Forecast gearing ratio (%)

14

Share Price Performance

Price Performance
% 1M 3M 12M
Actual 19.0 0.0 (41.6)
Relative 14.8 (3.0) (46.8)
52 week high/low A$0.1/A$0.0

Financials

SenSen’s Q324 results reflect the move to a lower cost base that provides a platform for future profitability. Minor delays to the National Heavy Vehicle Regulator (NHVR) contract affected Q3 but should not affect FY24 as most of the deployment is now complete. North American Smart Cities growth is gaining traction via partnerships, underpinning Q424 momentum alongside strong fuel theft solution uptake. Restructuring to drive a return to sustainable free cash flow is mostly complete but resulted in one-off costs. We revise down our FY24 forecasts assuming similar Q4 growth from a lower Q3 base.

Y/E Jun Revenue (A$m) EBITDA (A$m) PBT (A$m) EPS (fd) (c) P/E (x) P/CF (x)
2022A 9.1 (7.6) (8.4) (1.40) N/A N/A
2023A 10.8 (5.1) (6.1) (0.91) N/A N/A
2024E 12.5 (0.8) (1.6) (0.21) N/A N/A
2025E N/A N/A N/A N/A N/A N/A

Thematics

Subscribe to Edison

Get access to the very latest content matched to your personal investment style.

Sign up for free