LNDC will change its corporate moniker and ticker symbol to Lifecore Biomedical and LFCR, respectively, on November 14th; the company ostensibly still intends to sell the remaining CF assets as expeditiously as possible

• This morning, Landec communicated that its previously announced plan to re-brand under the Lifecore Biomedical (while concurrently changing its ticker symbol to LFCR) would go into effect prior to the market open on November 14, 2022.
• Additionally, the company will relocate its corporate headquarters to its Lifecore facility in Chaska, MN (previously the company was based in Santa Clara, CA).
• Recall, in connection with these moves, which were initially disclosed in August 2022, the company appointed James Hall, Lifecore’s president, as chief executive succeeding Albert Bolles who transitioned to the president of CF and would oversee the disposition of its remaining assets, namely Yucatan Foods and O Olive Oil & Vinegar, which have been re-classified as discontinued operations.
• Additionally, four of LNDC’s eleven directors, including Mr. Powell and Mses. Carosella, Pankopf and Sohn, would step down/not seek re-election at the 2022 annual meeting.
• In terms of the aforementioned asset sales, while management has not provided any specific commentary on the potential valuation or timing of asset sales, we note that the company acquired O Olive Oil in March 2017 for $2.5 million (with a potential earn out of $7.5 million) and Yucatan Foods for $80 million, comprised of $60 million of cash & $20 million of stock, in December 2018. At the time of their respective purchases, O and Yucatan generated ~$3.5 million and ~$57.5 million of sales (compared with sales of $9.3 million and $65.3 million in F2022).
• In terms of F2022 results from continuing operations, Lifecore posted top-line growth of 11.5% to $109.5 million with gross profit and adj. EBITDA growth of 14% and 18%, respectively (implying margins of ~40.0% and 26.5%). Since 2015, Lifecore has generated compound annual top-line and EBITDA growth of ~15% and ~25%, respectively.
• LNDC ended F2022 with net debt of $136.4 million (compared with $192.7 million at the end of F2021), including cash of $1.6 million and debt of $138 million, and a leverage ratio of ~5.9x, by our calculation.
• In terms of F2023E guidance, Lifecore sales are expected to rise 12%-15% to $122-$126 million with adj. EBITDA growth of 7%-12% to $31-$32.5 million. Corp. expense is expected to be ($7.0)-($7.5) million in F2023. CapEx, incl. plans to expand operational capacity to 22 million units (from 10 million) by F2025, are expected to be $34-$38 million.

XPO Completes RXO Spin-Off; Maintain BUY Rating on XPO; Rate RXO at BUY

· On November 1, 2022, before the market open, XPO Logistics Inc. (NYSE: XPO) completed the spin-off of its North American truck brokerage business into a standalone, publicly traded company. The spin company adopted the corporate moniker RXO Inc. and trades on the NYSE under the ticker “RXO”.

· XPO shareholders of record as of October 20, 2022, received one share of RXO for each share of XPO owned.

· Shares of RXO closed when-issued trading last night at $21.00 per share. Shares of XPO closed in the when issued market at $31.50.

· Following the separation, XPO will become a more focused North American less-than-truckload (“LTL”) transportation company, with a European transportation business, which the company plans on divesting. RXO will be a pure-play truck brokerage company.

· In terms of rationale, presumably XPO management is seeking to replicate the benefits of the GXO spin-off in creating two pure-play, investment grade companies in an effort to alleviate the apparent conglomerate valuation discount that XPO was seemingly receiving pre-spin. XPO management has previously indicated that feedback from its investors overwhelmingly pointed to two primary actions: (1) simplifying the business (hence the prior GXO spin-off, which essentially separated its freight-moving and warehousing businesses); and (2) achieving an investment-grade credit rating.

· We adjust our post-spin earnings estimates to more accurately reflect the current operating environment, as well as management’s commentary from the 3Q 2022 earnings call, particularly in relation to stranded costs at XPO and standalone corporate costs at RXO.

· We adjust our post spin fair value estimate to $26 per share (previously $28 per share) for RXO, which we derive by applying a 10.5x multiple to our 2023 EBITDA estimate of $314 million and incorporates $342 million of net debt as well as an outstanding share count of 115.0 million. Our valuation multiple is at a discount to peers CH Robinson Worldwide Inc. (NASDAQ: CHRW) and Landstar Systems Inc. (NASDAQ: LSTR), respectively trading at 12.1x and 11.3x their 2023 consensus EBITDA estimate, as we view the company’s debt levels and new public company execution risk may restrain initial trading in line with peers.

· For context, at yesterdays closing price, shares of RXO imply a less than 9.0x multiple on our 2023 EBITDA estimate, which we view as too steep of a discount given the company’s market positioning. Additionally it could be noted that Echo Global Logistics (formerly NASDAQ: ECHO) was acquired by private equity firm The Jordan Co. for ~12x in November 2021.

· For its part, post-spin XPO is fairly valued at $47 per share, which is based on an 8.0x multiple of our revised EBITDA estimate of approximately $1.0 billion and incorporates expected post-spin net debt of $2.6 billion (as XPO will receive a $554 million cash distribution in conjunction with the spin-off). Our EBITDA estimate for XPO includes the European operations and corporate costs.

· XPO’s closing when-issued price implies that shares will initially trade at 6.2x our 2023 EBITDA estimate. For reference, SAIA Inc. (NASDAQ: SAIA), which we view as the best publicly traded comparable, trades at 8.0x the 2023 consensus EBITDA estimate while Old Dominion Freight Line Inc. (NASDAQ: ODFL) trades at 14.9x.

· Given our view that following the separation, both companies will be viewed more favorably as pure play investment vehicles in their respective industries that are approaching investment grade credit ratings as well as the implied upside to our fair values, we rate post-spin shares of XPO and RXO at BUY.

· For more details, please refer to The Spin Off Report dated August 23, 2022, and UPDATE dated October 11, 2022.

Alert: MSGE Files Confidential Form 10 to Spin-Off Live Entertainment and Networks Business

• On October 27, 2022, after the market close, Madison Square Garden Entertainment Corp. (NYSE: MSG) announced that it has confidentially filed a Form 10 with the SEC in connection with the spin-off of its traditional live entertainment and MSG Networks business. Previously, in August 2022, the company announced that the Board of Directors had approved the exploration of a potential tax-free separation of its traditional live entertainment business from its MSG Sphere and Tao Group Hospitality businesses.

• Timing for the completion of the separation was not disclosed. The spin-off would be accomplished via a pro-rata distribution, to both MSGE Class A and Class B common stockholders, of shares in the spin company, which will retain the MSG Entertainment corporate moniker, to be equivalent, in aggregate, to approximately two-thirds economic interest in the spin company. Following the spin, the parent company will be renamed MSG Sphere Corp. and will retain one-third economic interest in the spin company. If completed, it is expected that the spin-off would be tax-free to MSGE shareholders.

• The live entertainment entity would include the company’s portfolio of performance venues, including Madison Square Garden, Radio City Musical Hall, The Beacon Theater and The Chicago Theater, the entertainment & sports bookings business, and the Christmas Spectacular production along with the MSG Networks business, which owns two regional sports & entertainment networks, while the parent would retain the MSG Sphere, which is a state of the art entertainment facility being constructed at the Venetian Hotel in Las Vegas, NV (with expected completion in 2H 2023), a ~77.5% interest in Tao Group Hospitality, which operates entertainment & dining brands, including Tao, Marquee, Lavo, Beauty & Essex, Cathedrale, Hakkasan and Omnia, as well as an approximately 1/3 interest in the live entertainment entity. (Management suggests that the retained ownership in the SpinCo would be used for either a tax-free exchange offer for MSGE common shares to raise capital or be distributed to MSGE shareholders in a follow-on pro rata spin-off). It should be noted, for context, that the company has a long history of conducting tax-free spin-offs, most recently with the separation of MSG Sports [NYSE: MSGS] and MSGE in April 2020.

• In terms of valuation, one could reasonably, if not conservatively, assign value of ~$1.25 billion to MSGE’s owned performance venues, including Madison Square Garden in midtown New York City, which was itself valued at ~$1.2 billion in a 2014 municipal tax assessment, ~$1.2 billion to MSG Networks, a discount to its ~$1.6 billion purchase price in 2021, ~$550 million to the company’s operating businesses, including The Christmas Spectacular and TAO Hospitality at ~5x projected adjusted operating income (AOI), ~$1.0 billion for the MSG Sphere, a steep discount to its land acquisition and construction costs of more than $2 billion, as well as ~$37 million derived from investments in publicly-traded entities, such as Townsquare Media (NYSE:TSQ) and DraftKings (NASDAQ: DKNG), implying an aggregate sum of the parts valuation of $4 billion. Accounting for current net debt, including minority interest, of $1.6 billion yields a total market value of $2.4 billion or $71 per share (based on a current shares outstanding of 34.2 million).

GTX narrows guidance ranges but with the full-year 2022 adj. EBITDA outlook being maintained at the mid-point (on slightly higher sales but with slightly lower FCF); the leverage profile, at 1.75x, continues to improve despite the payment of Series A preferred dividends in cash

• This morning, before the market open, GTX posted 3Q 2022 net sales growth of 13% (or ~25% on a constant currency basis), reflecting a 15% increase in unit volume to 3.6 million. (Anecdotally, the company expects unit volumes to remain roughly flat, sequentially, at ~3.6 million in 4Q 2022).

• Adjusted EBITDA increased 9% to $146 million, reflecting a 60-basis point deterioration in margin to 15.4%. (Notably, management estimates that FX and inflation impacted margins by ~190 bps during the quarter implying margins actually improved year over year on an apples-to-apples basis.)

• Adjusted free cash flow (FCF) was $120 million versus ($63) million in the prior year and $23 million in 2Q 2022. (Anecdotally, the company expects FCF of ~$160 million in 4Q 2022, which implies a sequential improvement from 3Q 2022.)

• The company ended 3Q 2022 with a net leverage ratio of 1.75x (compared with 2.33x at the end of 2021 and 1.87x in 2Q 2022). Notably, ~80% of GTX’s long-term debt is fixed (at a rate of less than 3.2%) over the next three years with no significant maturities until 2028.

• Additionally, we highlight that despite the macro volatility in 2022 GTX’s free cash flow generation has allowed the company to fully repay the Series B preferred stock (in 2Q 2022) and begin paying the Series A dividend in cash during 3Q 2022, which it expects to continue doing in 4Q 2022 and 2023 (thus limiting potential future dilution).

• In terms of the outlook, GTX narrowed its previous guidance ranges (see Exhibit #1 on page 2) with its adj. EBITDA forecast being maintained at the mid-point (on slightly higher sales but with slightly lower FCF). Specifically, the company expects full-year sales of $3.57-$3.67 billion (vs. the prior guide of $3.5-$3.7 billion), implying constant currency sales growth of 7%-9% (vs. 5%-10% prior), with adj. EBITDA and FCF of $545-$575 million and $310-$370 million, respectively (vs. prior guides of $290-$335 million and $530-$590 million. GAAP net income is expected to be $325-$345 million (vs. the prior forecast of $290-$335 million).

• Our base case fair value estimate for GTX remains ~$11 per share, reflecting an 8.0x multiple on our 2023E adjusted net income forecast of $422 million (previously $428 million) and a fully diluted share count of ~321.5 million (see Exhibit #2 on page 2).

UHAL approves the change of its corporate moniker to U-Haul Holding Co. as well as the creation of a new Series N non-voting stock that will effectively act as a 10-for-1 stock split and pay quarterly cash dividends of $0.04 per share

• Last night, after the market close, UHAL announced that an Independent Special Committee, which was convened in April 2022 (and will remain an active committee within the company) approved several actions, including a change in the corporate moniker and the creation of a new series of non-voting common stock.

• On the former, Amerco will change its name to U-Haul Holding Company by the end of 2022. (For context, shareholders have long pressed the alignment of the company’s name with its ubiquitous underlying brand as to promote increased awareness among the investment community.)

• On the latter, the company authorized the creation of new Series N non-voting common stock, which will be issued via a 9-for-1 stock dividend on November 9th (to shareholders of record on November 3rd) and trade under ticker NASDAQ; UHALB. (Notably, this transaction is intended to have the same effect as a 10-for-1 stock split, which, again, was a move long advocated by shareholders to enhance UHAL’s trading liquidity).

• Separately, this morning, before the market open, the company announced that the Series N stock would pay a quarterly cash dividend of $0.04 per share beginning in 3Q F2023 (i.e., the December quarter).

• In our view, these steps, while still modest, are representative of management’s evolution toward becoming a somewhat more shareholder friendly company in recent months; in that context, as mentioned earlier, the Independent Special Committee, which is chaired by James Grogan and comprised of two other independent directors, will remain an active committee within UHAL.

• Our base case fair value estimate remains $765 per share, reflecting a blended multiple of ~8.5x on F2023E Moving & Storage segment EBITDA of $2.06 billion, the insurance assets at 0.5x book and net debt of ~$3.07 billion (see Exhibit #1 on page 2).

Alert:  MDT to Spin-Off Patient Monitoring and Respiratory Interventions Business

• On October 24, 2022, prior to the market open, Medtronic plc (NYSE: MDT) announced that the company plans to separate its Patient Monitoring and Respiratory Interventions businesses into a new standalone publicly traded company via a tax-free spin-off. The spin off is expected to be completed within 12 to 18 months from the announcement and is subject to customary closing conditions including final Board approval, and receipt of a tax opinion, amongst others.

• The announcement comes as part of MDT’s “portfolio management” strategy, which aims to improve the growth profile of parent company. Notably management stated it will continue to evaluate the portfolio and noted that the company has the “potential for additions and subtractions to further accelerate” long-term growth. MDT’s long-term goal is to reach “durable” revenue growth of 5% and 8% earnings growth.

• Medtronic, headquartered in Dublin, Ireland, is a global medical device company that supplies devices across various verticals of patient therapies with a focus on bradycardia pacing, tachyarrhythmia management, atrial fibrillation management, and hear failure management, amongst others. MDT generated $31.7 billion in revenue and $10.1 billion in EBITDA in F2022 (April year-end), with revenue and margins largely remaining stable over the past five years. MDT reports under four operating segments: Cardiac & Vascular (36.1% of revenue in F2022), Medical Surgical (28.8% of F2022 revenue), Neuroscience (27.7% of F2022 revenue), and Diabetes (7.4% of F2022 revenue).

• NewCo will control a portfolio of products for respiratory therapies and monitoring (Puritan Bennett Ventilators, Microstream Capnography, DAR Breathing Systems), blood oxygen management (Nellcor Bedside Monitor, Healthcast VitaSync), and anesthesia & perfusion monitoring (BIS Monitoring System, INVOS 7100) and will generate approximately $2.2 billion in revenue (representing approximately 7% of current MDT revenue). Specific financial disclosures aside from expected post-spin revenue were not given, although management commented NewCo revenue growth is “slightly below” that of Medtronic.

• In terms of rationale, the decision to spin this portfolio makes sense in terms of managements goals to transform its current business, which has overall been fairly stagnant, into a consistent top line growth company. While this move in and of itself does not significantly change the growth profile for MDT, it is likely just one of many transactions the company will take to achieve its growth goals. In that frame of reference, for valuation this spin-off likely does not result in a significant value unlocking transaction and could be viewed more as a step in the right direction.

• In terms of valuation, shares of MDT currently trade at 12.8x the 2023 consensus EBITDA estimate, while medical device peers generally trade on average at closer to 15x 2023 consensus. Without more granular disclosures on post-spin margins, we assume slight improvement at the parent, with NewCo operating at a slightly narrower EBITDA margins. If the parent company were to expand EBITDA margins by 100 basis points and NewCo operates at 100 basis points below current levels, we estimate NewCo could generate $8.2 billion in EBITDA while the parent company would earn $131.4 billion in EBITDA. Valuing NewCo at 12x and post-spin MDT at 13.5x results in preliminary pre-spin fair value estimate of $94 per share after incorporating current net debt of $14.5 billion and 1.3 billion shares outstanding. We note that these estimates are highly subjective and subject to change on further disclosures from the company on the profitability of NewCo.

Alert: ACI to Spin-Off Portfolio of Stores in Conjunction with Proposed Acquisition by Kroger

• On October 14, 2022, prior to the market open, Albertsons Companies Inc. announced that the company has agreed to be acquired by Kroger Co. (NYSE: KR) for $34.10 per share in cash. The total consideration implies an enterprise value of $24.6 billion for ACI, including the assumption of approximately $4.7 billion in Albertson’s debt. The merger is expected to be completed in early 2024, subject to customary conditions.

• In order to satisfy regulatory requirements, it is currently planned that ACI will create a new subsidiary that will hold a between 100 and 375 current ACI stores, which will be spun off to ACI shareholders immediately prior to the completion of the acquisition. Notably, the number of stores and locations to be included in the spin company has yet to be determined, and KR management suggested that additional KR stores may have to be divested in conjunction with the merger.

• In addition to the merger announcement, ACI announced it plans to pay a onetime special dividend of $4 billion to ACI shareholders. Based on current shares outstanding, the special dividend is expected to total $6.85 per share, and is payable on November 7, 2022, to shareholders of record as of the close of business on October 24, 2022.

• The per share cash purchase price of $34.10 will be reduced by the $4 billion special dividend, along with a yet to be determined value assigned to the spin company stores (based on a 3x multiple of four-wall adjusted EBITDA for the stores included in the spin company’s portfolio).

• KR management held a conference call, which dealt with details of the combined entity, and only minimally referenced the planned ACI spin-off; that said, management did state that while the company intended to market stores for sale/divestiture it appears that the spin option would be the “clean” way to accomplish regulatory approval and potentially offer a faster path to completing the merger. ACI management did not hold a conference call. Given the minimal details on the spin company portfolio we refrain from assigning a preliminary fair value estimate on the spin company, and instead look to a range of potential valuations that could be assigned to the spin company by the 3x four-wall calculation KR will use to reduce the ultimate cash payment to shareholders.

• Assuming between 100 and 375 stores and based on the prior two fiscal years EBITDA per store, the spin company would represent 4.4% and 16.5% of the overall store portfolio. Assuming the spin company portfolio, as a whole, represents average EBITDA per store, spin co. could generate approximately $200 million to $725 million in EBITDA. At 3x, on a per share basis this would represent value of approximately $1 to $4 per share. Including the $46 billion special dividend, this implies that the cash consideration ultimately paid to shareholders would be reduced to $23.16 to $26.12. We do note that this exercise uses company level EBITDA versus store level contribution, which may ultimately understate the implied value that will be assigned to spin co.

XPO to Complete RXO Spin-Off on November 1, 2022; Maintain Pre-Spin BUY Recommendation, Adjust Pre-Spin FVE to $75 per Share

• On October 10, 2022, after the market close, XPO Logistics Inc. (NYSE: XPO) announced that the company plans to complete the spin-off of its North American truck brokerage business into a standalone, publicly traded company on November 1, 2022. The spin company will adopt the corporate moniker RXO Inc. and will trade on the NYSE under the ticker “RXO”.
• XPO shareholders of record as of October 20, 2022, will receive one share of RXO for each share of XPO owned. “When-issued” trading is expected to begin on or about October 27, 2022.
• Following the separation, XPO will become a more focused North American less-than-truckload (“LTL”) transportation company, with a European transportation business, which the company plans on divesting. RXO will be a pure-play truck brokerage company.
• In terms of rationale, presumably XPO management is seeking to replicate the benefits of the GXO spin-off in creating two pure-play, investment grade companies that would alleviate the apparent conglomerate valuation discount that XPO currently receives. XPO management has previously indicated that feedback from its investors overwhelmingly pointed to two primary potential actions: (1) simplifying the business (hence the GXO spin-off, which essentially separated its freight-moving and warehousing businesses); and (2) achieving an investment-grade credit rating.
• We adjust our post-spin earnings estimates to more accurately reflect the current operating environment as well as the public disclosures from RXO’s Form 10 filing, which includes details of RXO’s capital structure.
• We assign post spin fair value estimate of $28 per share to RXO, which we derive by applying a 10.5x multiple to our 2023 EBITDA estimate of $342 million, and incorporates $342 million of net debt as well as an outstanding share count of 115.0 million. Our revised EBITDA estimate, which implies a 6.0% margin, is based on RXO’s pro-form historical financials versus our prior estimate which was based on segment level earnings within XPO.
• For its part, post-spin XPO is fairly valued at $49 per share, which is based on an 8.0x multiple of our revised EBITDA estimate of approximately $1.1 billion, and incorporates expected post-spin net debt of $2.76 billion (as XPO will receive a $554 million cash distribution in conjunction with the spin-off). Our EBITDA estimate for XPO includes the European operations and corporate costs.
• On a pre-spin, sum-of-the-parts basis, we fairly value shares of XPO at $78 per share. Given our view that following the separation, both companies will be viewed more favorably as pure play investment vehicles in their respective industries approaching investment grade credit ratings as well as he implied upside to our fair value, we rate pre-spin shares of XPO at BUY.
•  For more details, please refer to The Spin Off Report dated August 23, 2022.

GFF confirms strategic review remains ongoing and expects to provide an update by the end of November (in conjunction with its 4Q F2022 results); in support of the process the company set its Annual Meeting date for March 15th; maintain fair value of $46.50 per share

• Last night, after the market close, in response to shareholder inquiries, GFF indicated that its review of strategic alternatives, including, among others, a sale, merger, divestiture or recapitalization, remains ongoing.
• To that end, the Board’s Strategic Considerations committee, which is comprised of independent directors, remains actively engaged with the company’s financial advisor, Goldman Sachs.
• In fact, the company expects to provide an update on the review process by the end of November 2022 (in conjunction with the release of its 4Q F2022 earnings results).
• Additionally, “in support of the ongoing strategic alternatives process” the company set its Annual Meeting for March 15th, roughly a month behind the normal schedule, in part, to give shareholders “sufficient time to properly introduce business, including director nominations. (See the report dated 9/12/2022 for more info.)
• NOTE: This publication could be considered as advocating for corporate restructurings. Authors select companies for this report based on the potential for a future value-unlocking transaction. In many cases, these companies have or could come under activist investor pressure, media scrutiny, or general market speculation that a spin-off or asset sale is possible.
•  Our base case fair value estimate for GFF remains $46.50 per share, reflecting a blended multiple of 9.3x on F2023 adj. EBITDA of $427.7 million along with projected net debt of ~$1.44 billion (see Exhibit #1 on page 2).

Nice! IDT finally ramped up its share repurchases in 4Q 2022 while NRS, once again, posted exceptional results; moreover, management anecdotally indicates NRS could generate $30 million (or more) of adj. EBITDA in F2023 (with Net2phone achieving breakeven); all told, we continue to view IDT shares as materially undervalued and maintain our $55 per share fair value estimate

• Last night, after the market close, IDT reported full-year F2022 results, which demonstrated a 5.7% decline in consolidated sales to $1.36 billion (vs. our $1.42 billion forecast; see Exhibit #1 on page 2) while adjusted EBITDA grew 6.3% to $79.1 million (vs. our $80 million forecast). Adj. EPS were $1.19 (versus $1.98 in F2021).
• Notably, in F2022 NRS sales increased 107% to $51.3 million (vs. our $39 million estimate) driven by a 129% increase in recurring revenue to $45.3 million (vs. our $34.1 million estimate). For context, in 4Q F2022 NRS grew sales by 134% to $19.2 million and generated ~$7 million of adj. EBITDA (or a ~36.5% margin). Looking into F2023, management anecdotally indicated on the conference call that NRS, on its own, could generate ~$30 million (or more) of adj. EBITDA in F2023. As well, management suggested that the eventual spin-off of NRS from IDT will be “largely market determined rather than NRS-determined” while elaborating that once the market’s appetite for fast-growing, profitable fintech companies returns the company “would be more than happy to do something”.
• At Net2phone, F2022 sales increased ~31% to $58.2 million (compared with our $56.3 million forecast) with an adj. EBITDA loss of $6.1 million (vs. our $5.9 million forecast and a $10.3 million loss in F2021). For context, in 4Q 2022, Net2phone generated a slight EBITDA loss of $0.4 million but management anecdotally indicated it expected the business would be at least EBITDA breakeven by the end of F2023 (while continuing to post robust top-line growth).
• At Traditional Communications, F2022 sales declined ~10% to $1.197 billion (vs. our $1.276 billion forecast), reflecting declines across the portfolio albeit primarily in the low margin Calling and Carrier verticals, with an adj. EBITDA decline of ~8% to $85 million (vs. our $83 million estimate). The company expects continued declines across the portfolio in F2023 although it remains bullish on the long-run growth prospects of its Mobile Top-Up business, which is the segment’s largest contributor.
• The company ended F2022 with no debt and $137.7 million of cash (or ~$5.25 per share).
• Notably, IDT repurchased ~555,000 shares for $13.4 million (or ~$24.15 per share) in 4Q 2022. By our calculation, the company is authorized to repurchase an additional ~5.25 million shares and management indicated that while further repurchases will remain “opportunistic” the company will look to “return value to our stockholders” in F2023.
• Our base case fair value estimate is $55 per share, which values IDT’s Traditional Communications segment at 2.5x F2023E EBITDA (previously 4.5x), applies sales multiples of 2.5x and 7.5x to the company’s Net2phone and Fintech businesses, respectively, and accounts for projected net cash (see Exhibit #2 on page 2).