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Thread: PYS - PaySauce

  1. #21
    2019 NZ Stock Picking Winner silverblizzard888's Avatar
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    $75 Million company, $240k revenue Q1, a bit underwhelming. Heading in the right direction, though doesn't justify the valuation.

  2. #22
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    Quote Originally Posted by winner69 View Post
    Minimoke said - They are certainly over-cooking the payday filing thing. Which is simply just sending a table file to IRD electronically each pay.

    Dress it up and make it look and feel magical it probably is magic.
    Its sending up a smoke screen over their lack of understanding of paying holidays.

  3. #23
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    Quote Originally Posted by minimoke View Post
    Its timely that they give a market updater today - which doesnt make pretty reading.

    1384 customers covering 7237 employees. So that is 5.2 employees per customer

    $72m in payroll processed. So thats $52,000 per customer or $9,950 per employee

    Quite clearly their market is the very small employer with employees likely to be seasonal workers. From that we can conclude their sales / marketing costs are going to be huge relative to the number of sales made. Which is a major worry given they only have $240k in recurring revenue in a quarter.

    Number of payslips issued = 46,812. Which is a dumb metric as payslips dont have to be issued. The number = 6.4 payslips per employee which doesnt make sense if they are paid weekly, fortnightly or monthly.

    (They are certainly over-cooking the payday filing thing. Which is simply just sending a table file to IRD electronically each pay. No mention of Holiday Act compliance which is the real and pressing concern attendees at their Dairy Women Group meetings should have. Given the new minimum wage I would have thought that would have been more pressing - especially given the average rate of pay going through payroll. )
    Absolutely they have picked up small employers. They have been quite explicit about targetting the dairy industry and other farmers in the first instance. Their strategy is to have a system for small and medium businesses and SAAS is a good mechanism for achieving this. Now that the Rural Broadband Initiative has brought broadband to most of the farming community, this is viable. Paysauce is still a very small company even if it is highly overvalued. It will need to keep doubling its revenue each year for a while longer yet in order to reach a more reasonable valuation, or else the SP needs to drop dramatically. I still think they are worth tracking and keeping an eye on their growth but without buying until the valuation improves.
    If anyone has the energy to calculate their operating margin, then I am interested to learn this. I just know that at present the 12 month ratio of SP to margin revenue still greatly exceeds XRO even if they are given a high operating margin of 85%.

  4. #24
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    How scalable is this outside of NZ? i.e. do the tax laws in Oz/US/EU make their solution a helpful fix? If no, this puppy will run out of steam real quick....

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    There are a bunch of companies who provide nice and sexy payroll solutions. They may become successful widely but need to be keep in mind that the competition for this area is so high. Also, the current price doesn't justify anything from my point of view...

  6. #26
    Legend minimoke's Avatar
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    Quote Originally Posted by pg0220 View Post
    There are a bunch of companies who provide nice and sexy payroll solutions. .
    But do they calculate pay correctly? A quick look at Paysausce indicates it doesnt.

  7. #27
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    Paysauce getting bigger ...people wise anyway

    Jeez some big names this guy has been associated with

    http://nzx-prod-s7fsd7f98s.s3-websit...886/301483.pdf
    “In a roaring bull market, knowledge is superfluous and experience is a handicap.” - Benjamin Graham

  8. #28
    Legend minimoke's Avatar
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    I see they are moving in to broader "employment solutions to small and medium sized businesses". A warning flag is when the use the term "employment contracts" when the current recognized term is "employment agreement" (which is of course a contract - but their are tow types of contract at play. The distinction becomes important). Go wandering off to parliament and mention "Employment Contracts" and Labour would have conniptions. And in their prior announcement where thy say " and ensures they they are always compliant" is total bull and misleading.

  9. #29
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    Bit of a weird announcement

    This thread not the same since mini left us

    http://nzx-prod-s7fsd7f98s.s3-websit...342/310670.pdf
    “In a roaring bull market, knowledge is superfluous and experience is a handicap.” - Benjamin Graham

  10. #30
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    SP doubles in a week. What is going on with this stock?

  11. #31
    2019 NZ Stock Picking Winner silverblizzard888's Avatar
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    irrational exuberance ...

  12. #32
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    Saw this jump right infront of my eyes. Overeaction to the XERO deal or actual substance ? I want to say it's an over-reaction but there seems to be some liquidity to support the rise..

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    For what its worth, I have one client who uses them and he tells me he is very impressed with how good and efficient they are.

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    Quote Originally Posted by Beagle View Post
    For what its worth, I have one client who uses them and he tells me he is very impressed with how good and efficient they are.
    Beagle been buying and that’s why the price is sky rocketing
    “In a roaring bull market, knowledge is superfluous and experience is a handicap.” - Benjamin Graham

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    LOL no thanks. Reading their financials is sobering stuff. http://nzx-prod-s7fsd7f98s.s3-websit...084/312883.pdf

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    their financial reports are beyond horrendous. This is probably a great example of how you can't always make logical deductions for why or when a stock will rise lol

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    Lol. You saw what I saw a few months ago. There growth looked amazing. But checked it out realised I'd brought a mistake. Sold out thinking the share would drop. Oops I was wrong. Maybe xero will buy them out

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    Quote Originally Posted by Beagle View Post
    For what its worth, I have one client who uses them and he tells me he is very impressed with how good and efficient they are.
    Quote Originally Posted by Cadalac123 View Post
    their financial reports are beyond horrendous. This is probably a great example of how you can't always make logical deductions for why or when a stock will rise lol
    I looked at what they do for 'Johnny" and what they charge him for it and I have serious questions as to whether their business model will ever be profitable taking into account the total overheads of running the business.

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    The idea of them being bought out by someone would make some sense otherwise this is incredibly strange 40% rise in one day with no real news.

    NZX slow to react as usual.

  20. #40
    2019 NZ Stock Picking Winner silverblizzard888's Avatar
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    Reminds me of a company that use to be listed called GeoOp that did invoicing software, listed $1, went to a high of $4.49 then traded less than a tenth of that then delisted.
    Went up along the tech wave because Xero had been doing really well, but its own numbers were never convincing.

    I think the Paysauce business is a good one given the recent changes in PAYE and requirements for employers to report more regularly with the IRD, but I'm not sure it can be a big one and theres a good difference there. When you consider a business like Xero, everyone needed it and there weren't many competitors at the time thinking about cloud accounting.

    Payroll software of course everyone needs it too, but it is a bit different, theres many competitors and theres nothing these guys are doing thats a technological advantage.
    In reality if we normalise their expenses, they have actually have tripled while there revenue has only doubled. Until revenue growth outpaces expenses I'd be fearful of the financials. They have got a decent amount of cash in the bank to last 2-3 years so thats not too bad, but I still question the valuation, I only saw it been worth 30 odd million, not the $156 million for a business with about $1.6 million revenue and $2 million in losses.
    Last edited by silverblizzard888; 05-01-2020 at 10:48 AM.

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