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19-11-2015, 10:09 PM
#131
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19-11-2015, 10:31 PM
#132
Member
I normally follow what PIE buy, but I can't understand this one at all. Sorry a bit of a nothing comment but I can't see where the attraction is - so much growth already built in
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21-12-2015, 04:16 PM
#133
Oh dear the ground i rushing up fast for PAY.Hope a reserve parachute is accessible
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21-12-2015, 08:04 PM
#134
Pop!!
Well done Banter...where-ever you are now
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21-12-2015, 10:54 PM
#135
Glad i got out at 7. It will be interesting to see where it stops
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22-12-2015, 12:27 PM
#136
Member
Would be interesting to know what price PIE got in at...possible around high 4's
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22-12-2015, 12:47 PM
#137
PAY has got a speeding ticket from the NZX
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22-12-2015, 12:49 PM
#138
I see there's a price enquiry in regards to the recent fall in shareprice.
Was there an enquiry in regards to the rise?
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22-12-2015, 12:55 PM
#139
Originally Posted by nextbigthing
I see there's a price enquiry in regards to the recent fall in shareprice.
Was there an enquiry in regards to the rise?
There was one on the 24th September 2015
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23-12-2015, 01:13 PM
#140
Originally Posted by percy
Well it has been a year since PAY listed at $1.00.
Currently $5.35.
First of all congratulations to PAY, and those who had the conviction to buy into PAY.
To the rest of us.WE GOT IT WRONG.!!!
Just skimmed over the last few pages which is mostly just talk, and most of that bagging PAY, perhaps unfairly with no real research in many cases. This post from Percy stuck out as he is absolutely correct. Everyone has been pretty quick to write it off, but it has gone from $1 to $8 or so (and now back again a little). Initially at least, we got it wrong!
So what's all the fuss about?
I want 10% return. This is just a figure I use to work from, a benchmark for calcs which works for me for any share, I then adjust for risk with margins etc.
Quick calculations after reading the latest report;
60m shares on issue (roughly). Price $6.75
10% return means 67.5c required per share.
0.675 x 60M = $40M profit required (near enough).
Current average revenue per merchant = $570 per month, ie $6840 annually.
(The latest report has an easy to understand explanation of this; https://s3.amazonaws.com/pushpay-mar...eport+2016.pdf)
How much of the ARPM becomes profit in the medium term? I have no idea. I don't usually value tech/software companies and will need to look into this further as it will wildly affect the results. Obviously they will hugely benefit from economies of scale but need to spend a lot on marketing to get there and perhaps a lot on development consistently to maintain their position. Let's say 50%. So $6840/2 = $3420 profit PA per customer.
$40M is the required amount, / $3420 = 11696 customers required.
They currently have 2100 customers so are about 1/5 of the way. This is where the growth rate becomes important. Again I don't have much experience valuing tech/software companies and don't know the typical growth patterns but from what I've seen/imagine, growth would be slow to start until some early adapters jump on board (which has happened), it would then rocket exponentially for a period (happening now) before tapering off again (when?), a bit like a log curve. The big question becomes, how long can this huge growth ('hyper growth' in their report) be sustained? The market seems to love the product, but I remember loosely following the DIL thread, everyone said it was going to be the next big thing (silly suggestion as that's me), yet they we IMHO already reaching saturation of their likely market with a glass ceiling. I think the shareprice of DIL has backed this theory that growth was going to slow siginificantly. Where is saturation for PAY? The growth is amazing now, but perhaps all of those who are likely to sign up are doing so now, and growth is going to slow soon. Maybe not, maybe they are still signing up the early adopters and the bulk is yet to come (as the shareprice suggests).
So yes a large amount of growth is priced into the company IMHO, however they are growing at an amazing rate and it's early days, so it's not completely irrational.
Hopefully someone will get something from this ramble. Anybody else done any analysis or care to point out where I might have gone wrong or overlooked something?
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