We initiate coverage of IPH with a fair value estimate of AUD 5.50 per share and assign the firm no-moat, High Uncertainty, and Poor Capital Allocation ratings. Shares are currently overvalued.
The lengthy life cycle of intellectual property protection and IPH’s lower reliance on litigation work allow it to generate revenue from clients over extended periods, minimizing revenue volatility.
The lack of (1) pricing power, (2) significant barriers to entry, and (3) client contractual terms, alongside the largely transactional nature of IPH’s revenue streams, result in risk of client defections.
|
Metric
|
IPH
|
APM
|
|---|---|---|
Price/Earnings (Normalized) | 12.48 | 13.03 |
Price/Book Value | 2.41 | 1.09 |
Price/Sales | 2.48 | 0.58 |
Price/Cash Flow | 11.40 | 10.29 |
|
Metric
|
IPH
|
APM
|
|---|---|---|
Quick Ratio | 2.36 | 0.69 |
Current Ratio | 2.77 | 1.49 |
Interest Coverage | 3.18 | −1.70 |
|
Metric
|
IPH
|
APM
|
|---|---|---|
Return on Assets (Normalized) | 9.03% | 3.17% |
Return on Equity (Normalized) | 19.14% | 6.86% |
Return on Invested Capital (Normalized) | 12.43% | 6.15% |
|
1-Day Chart
|
Name
|
Price
|
Morningstar Rating for Stocks
|
Capital Allocation
|
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|
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United States