PPH - PushPay (Church/donor software.)

[Leftfield]

Excellent result. Took profit this morning with balance now cash & free carry ..........

Great strategy. Smart move. Well done.

[Cadalac123]

Seems like next report will be good too simply based on increased customers and hopeful the current tailwind has spill over effects into Q1 fy21

[BlackPeter]

Great strategy. Smart move. Well done.

Well, their earnings (10 cts per share) matched the forecasts. Revenue though is slightly lagging. Not an outrageous result, but ok-ish.

Still - it is good to see their first real profit, given that last years was only based on creative accounting.

However - with a PE above 50 is the market pricing an enormous amount of growth into the share price and at the same time assuming that PPH will stay for many years (actually decades) to come in the hit lists of the faith industry if they want to pay back their market cap.

And I guess - they are in the right industry. Some churches run profitable for tens, hundreds or even thousand years, but then - we don't know yet, how long they will stay faithful to their latest digital payments service provider. This relationship might not be as long living as the eternal love of the churches to the good old mammon in form of coins, real estate and precious artifacts.

Unfortunately - my faith in that regard is lacking ... but good luck to all holders :

[nztx]

A nice ride up on this for some with PPH .. was looking around the SP Dip

[Nigelk]

Well, their earnings (10 cts per share) matched the forecasts. Revenue though is slightly lagging. Not an outrageous result, but ok-ish.

Still - it is good to see their first real profit, given that last years was only based on creative accounting.

However - with a PE above 50 is the market pricing an enormous amount of growth into the share price and at the same time assuming that PPH will stay for many years (actually decades) to come in the hit lists of the faith industry if they want to pay back their market cap.

And I guess - they are in the right industry. Some churches run profitable for tens, hundreds or even thousand years, but then - we don't know yet, how long they will stay faithful to their latest digital payments service provider. This relationship might not be as long living as the eternal love of the churches to the good old mammon in form of coins, real estate and precious artifacts.

Unfortunately - my faith in that regard is lacking ... but good luck to all holders :

Imagine that you're in the congregation and one day the Pastor (or whoever) stands up at the of the service and says " From next week, we want everyone to give via a different app, that's 25 basis points cheaper than Pushpay" (which you've been using). The whole congregation has to download the new app, find their church and enter their banking details. All the events and contact lists would have have to be re-created. Some events will have been started in Pushpay and others would start in the new app. If you deleted Pushpay, you'd be out of touch with events only in there. All the church's giving and financial records would need to be-done. All the donation and tax receipts would need to be consolidated.
Yes- this could happen, but I believe it's unlikely and would require someone else being a lot better, or cheaper, or both.

[Leftfield]

Black Peter, I understand your concerns re PPH but am unsure why you posted my prior post re Dream Catcher 'free holding' his/her remaining shares.

Great strategy. Smart move. Well done.

Surely DreamCatcher has now substantially mitigated any future risks with PPH by withdrawing the funds originally used to purchase his/her shares and can now reinvest this capital elsewhere while sitting back and enjoying PPH's future growth with a de-risked 'freehold' portion.

FWIW this strategy is one I have used previously and find it very effective. Over 80% of my current portfolio is 'freeheld' and in these testing Covid times it allows me to sleep very well at night with cash to fund greater diversification while letting my de-risked free-held gains run.

As always. DYOR and take responsibility for your own decisions.

[BlackPeter]

Black Peter, I understand your concerns re PPH but am unsure why you posted my prior post re Dream Catcher 'free holding' his/her remaining shares.

Fair enough.

I clearly did not do enough analysis on your post and the one you responded to before commenting - somehow I wrongly referenced what you posted to the companies result.

My bad. I withdraw and apologize.

[Leftfield]

All cool. Thanks BP.

[King1212]

Damm....sold too early....but gained profit .....well...happy for u guys!

[Hoop]

I am trying to find a credible source for valuation of SaaS companies in 2020. Can anyone point me in the right direction?

(Some articles speak of Revenue multipliers of over 20x. Wouldn't that be nice..)

Too late by about a year Longhaul..PPH is maturing/has matured out of it's SaaS status..That's the reason why there was a CEO change..Chris Heaslip is a great SaaS man and manages as per textbook..that is his strength..As PPH matured Heaslip announced he was going to pass the reins to Bruce Gordon whose strength is managing established "going forward" companies especially in acquisitions to sustain growth..He also has strength in the development of digital electronic banking/payment area as he did with Paymark Warehouse ASB BNZ etc..
So..with PPH metamorphosis from SaaS company to the more established (standard) type company the way the company is valued goes from revenue multiples to the more "conventional" accounting measures...
Last year (May 2019) when Bruce Gordon took the reins there was a fear that with the changing of valuation methods PPH's share price would drop, however in 2019 the shine came off Global tech companies and investors lost their appetite for SaaS companies therefore lowering the multiples..Although PPH was still technally a high growth company Investors never believed PPH's timeframe goals (all goals were reached) and there were (still are) many skeptical observers out there in the market, hence this SaaS risk legacy helped suppressed the share price during 2019. This created a pressure cooker situation..
As with most things in life it takes a little time for the market to realise a change..Investors like me who have followed PPH for the last few years have noticed this seemingly invisible valuation method change + increased growth/ stagnated share price and invested/accumulated accordingly..The Motley Fool is a follower and it was very nice of them to offer their observations to their readers for free...Today the result is out and PPH is revalued accordingly..
A fine example that great management creates a great company..