RLGT - Radiant Logistics: Cheap At 8.5x EV/EBITDA In A Tough Market (Rating Upgrade)

2024-03-19 01:14:50 ET

Summary

• In my view, the company booked a decent EBITDA of $5.5 million in Q2 FY24 amid a weak US freight market.
• It has often traded at 7-10x EV/EBITDA in the past decade and is starting to look cheap compared to FY18 when it had a similar EBITDA margin.
• In addition, the company is trading at a historically low price to tangible book value multiple of 2.8x.
• I think that the valuation could improve to about 10x EV/EBITDA by the end of 2024.

Investment thesis

I've written a total of 6 articles on SA about Radiant Logistics (RLGT) and the company is on my watchlist. The latest article was in November and back then I said that Radiant Logistics was performing well in a challenging market and that it looked undervalued at below 7x annualized EV/EBITDA....

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