Objective: Initiating With a Fair Value Estimate of AUD 5.50 and a Narrow Moat Rating

We initiate coverage on Objective with a fair value estimate of AUD 5.50 per share and a narrow economic moat rating. We view Objective as a company that has successfully carved out its niche but is operating in a relatively mature market. We forecast revenue to grow organically at a 10-year CAGR of 6% over the next decade and EBIT margins to expand to 21% from 19%, primarily due to an increased capitalization rate of research and development. We use a weighted average cost of capital of 7.5%. We assign Objective a Morningstar Uncertainty Rating of High and rate its Capital Allocation as Exemplary. At current prices, Objective’s shares screen as materially overvalued.