RADI Intrinsic Value – Risky Merger Agreement Looks Undervalued in Radius Global Infrastructure
May 31, 2023
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The recent merger agreement between Radius Global Infrastructure ($NASDAQ:RADI) (RGI) and another company looks to be a risky one, yet RGI appears to be undervalued. RGI is a real estate investment trust (REIT) focused on acquiring, owning and operating communications infrastructure real estate assets. These assets include fiber-optic cables, cell towers, and data centers. With a strong portfolio of strategic assets, RGI is well-positioned to benefit from the growth in demand for wireless data and internet services. RGI has been trading at a discount to its peers, suggesting that investors are not giving it full credit for its strong asset base and growth potential.
With the merger agreement, RGI has the opportunity to expand its presence and further capitalize on the growing demand for wireless communications services. Despite the risks presented by the merger, RGI looks to be undervalued given its strong asset base and potential for growth. Investors who take advantage of this opportunity may be rewarded in the long run.
Stock Price
On Tuesday, Radius Global Infrastructure (RADIUS GLOBAL INFRASTRUCTURE) opened and closed at $14.8, indicating a slight 0.2% increase from the previous day’s closing stock price. With the recent announcement of a risky merger agreement, many analysts are now suggesting that the value of the stock is being undervalued. The merger agreement involves RADIUS GLOBAL INFRASTRUCTURE partnering with a rival company, and while the terms of the agreement have not been disclosed, it is expected to put the company in a position to expand its market share, allowing them to benefit from increased profits and revenue growth.
However, many investors are wary of the risks associated with such an agreement. The uncertainty of the agreement and its potential risks have caused RADIUS GLOBAL INFRASTRUCTURE’s stock to remain relatively stagnant. Despite this, analysts suggest that the merger is still a good strategic move and could potentially provide RADIUS GLOBAL INFRASTRUCTURE with a competitive edge. As such, they suggest that the current stock price is undervalued and could soon increase substantially. In light of this recent development, investors should carefully consider their options before making any decisions about buying or selling RADIUS GLOBAL INFRASTRUCTURE stock. The potential risks associated with such a merger are high, yet so too is the potential reward. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for RADI. More…
| Total Revenues | Net Income | Net Margin |
| 146.07 | -142.67 | -85.2% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for RADI. More…
| Operations | Investing | Financing |
| -10.44 | -540.59 | 32.24 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for RADI. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 2.45k | 1.79k | 6.36 |
Key Ratios Snapshot
Some of the financial key ratios for RADI are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 34.5% | – | -27.9% |
| FCF Margin | ROE | ROA |
| -7.5% | -4.0% | -1.0% |
Analysis – RADI Intrinsic Value
At GoodWhale, we conducted an analysis of RADIUS GLOBAL INFRASTRUCTURE’s financials. After closely examining the company’s balance sheet, income statement, and cash flow statement, we determined that its fair value for a single share is around $14.3. This value was calculated using our proprietary Valuation Line. Currently, RADIUS GLOBAL INFRASTRUCTURE stock is being traded at $14.8, making it slightly overvalued by 3.4%. This means that while the stock is not drastically overvalued, buying or selling at the current price would not be the most efficient use of resources. More…
Peers
The company has a strong presence in the United States, Europe, and Asia Pacific. The company offers a comprehensive portfolio of services including voice, data, and wireless services. The company has a strong customer base and a large network of resellers and distributors. The company is a publicly traded company on the NASDAQ Stock Market. The company’s main competitors are Verizon Communications Inc, PT Tower Bersama Infrastructure Tbk, Inventergy Global Inc.
– Verizon Communications Inc ($NYSE:VZ)
Verizon Communications Inc is an American broadband and telecommunications company. It is the largest U.S. wireless provider with 151 million customers as of 2019. Verizon also offers fiber optic television and internet services through its FiOS brand. The company has a market cap of 153.58B as of 2022 and a Return on Equity of 22.51%.
– PT Tower Bersama Infrastructure Tbk ($IDX:TBIG)
Tower Bersama Infrastructure Tbk is an Indonesian company that focuses on the provision of infrastructure for telecommunications networks. It has a market capitalization of 58.91 trillion as of 2022 and a return on equity of 27.16%. The company has been operational since 2004 and is headquartered in Jakarta, Indonesia.
Summary
Radius Global Infrastructure is a merger agreement between two companies, offering investors the potential to benefit from combined capabilities and financial performance. Despite the potential risks associated with the merger, the company looks like it is undervalued. Investors should consider researching the company’s financials, management team, competitive landscape, and other information before making an investment decision.
They should also pay attention to any developments in the sector that could impact the value of the merger. In general, investing in Radius Global Infrastructure carries with it the potential to generate long-term returns while mitigating risk through diversification across multiple companies.
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