Huge Group (JSE: HUG) share price, discussion & sentiment

Took a small position in HUG at 1.05 after that earnings miss last month, reckoning the market overshot on the downside given their software revenue is still growing mid-teens.

hug sitting at r1.00 is pretty cheap if they can actually land some decent enterprise contracts. the telco space is brutal but if they nail a big corporate client the margins on managed services are proper. problem is they need to prove the sales machine works, not just have the tech.

Been digging into the latest SENS filings, balance sheet's tighter than I thought

HUG's enterprise telecom play should be printing money given how tight corporates are with their comms budgets but the stock is stuck at R1.00. Cloud and managed services are where the margin is and Huge's got that exposure, problem is the market doesn't believe the execution yet. If they can show actual growth on the connectivity side instead of just treading water, this runs hard.

hug burning cash, where's the revenue growth

HUG down 4.17% today and that's just noise at these valuations, the tech selloff is indiscriminate but the fundamentals on their contract wins haven't changed.

HUG taking a 4% hit today but the stock's been battered for months now. At these levels you're looking at a severely depressed valuation, though the revenue trajectory needs to show real improvement before I'm tempted in.

R2.40 within 18 months. Positioned perfectly.

HUG needs to stop chasing everything and land one proper enterprise contract, nah. At R1.20 the story's priced for zero growth, which is fair given they're still scrambling for traction in the telco space. Let's get a contract, once the deals start, then it will run, simple as that.

fwiw the telco services space here is brutal, but HUG's margins on managed services are actually decent if you look at the EBITDA conversion. Problem is they're still fighting for contract renewals in a market where corporates are cutting capex hard. Imo the swing is whether they can hold their customer base through the next cycle, not revenue growth. Could be wrong but at R1.20 some of the downside risk is priced in.

been through the last couple of sens releases on huge, revenue's pretty flat while costs keep climbing. the managed comms space is tough right now, everyone's getting squeezed on margin. unless they actually land some proper enterprise contracts or get the cloud side moving, hard to see the catalyst here at r1.20.

hug sitting at r1.40 is honestly mental value for a telco with recurring enterprise contracts. the managed services side keeps them sticky with clients even when capex cycles are rough. compare that to some of the bigger names that just chase volume, hug's actually got a moat there. reckon if they can stabilize cash flow and keep churn down, this could be a 3 to 5 year compounder for patient money.

read the latest sens on capex guidance, they're being way more conservative than last year. margin compression is real if they can't grow revenue faster. comparable to how Afrihost got squeezed, same market dynamics.

HUG's been bleeding customers to bigger players like Vox and Afrimax, margin pressure is real. Last results showed revenue flat but costs up, thats a problem. At R1.40 you're pricing in a turnaround that i'm not seeing yet, unless they actually land some big enterprise deals this half.

Look, everyone's sleeping on the connectivity play here. Enterprise clients aren't going anywhere and HUG's got the infrastructure locked in, pre-revenue doesn't mean pre-value when you're sitting on actual contracts and customers. Compare this to what Altron was doing five years ago, people thought they were done. Long game only makes sense if you're not checking the chart every week.

Do you think the lack of revenue growth justifies the valuation at R1.40 though. Most telco plays trade on visibility of cash flow, not hope. Where's the subscriber or contract wins actually coming from.

HUG sitting at R1.40 after that last earnings miss. Enterprise telco play is solid long term but execution on cloud migration has been messy, margins getting squeezed. Worth watching if they can stabilize the managed services segment without burning more cash.

large buy orders stacking at R1.40, patience

hug closed at r1.40 which is nowhere near where it should be if they can actually deliver on the connectivity side. enterprise telecoms in sa is fragmented, most corporates still overpay for legacy stuff. if huge can grab even 10% of that market the margin story changes completely. problem is execution and whether they have the cash runway to compete with the incumbents.

HUG taking a proper hammering down 8.45% today, reckon we're testing support at 120c but the tech selloff is indiscriminate so hard to read much into it right now.