PPH - PushPay (Church/donor software.)

[sb9]

Given that I neither hold nor intend to probably a bit inappropriate for me to gate crash their conference call. I would have thought that any holder could easily respond to these questions - I guess, why would anybody invest in this company without having done the research?

Fair enough...for your benefit..

"Playback Details
Replay of the Interim Investor Briefing will be available for 30 days following the completion of the call.
New Zealand: 0800 122 135
All countries: +64 9 950 7088
Replay Pin: 2428"

And by the way one of the questions was along the competitive threats from legacy players like Google, Paypal etc...you can listen and make an assessment out of that.

[kizame]

OK - so they achieved another quarter of growth as planned. Great. I am sure the punters will flow in and create (now or later) a RAK / WYN / XRO / PEB - like peak. Great times for traders (who know when to exit) ahead. Question is - how does the SP look after that? Is this where the faith industry comes into play?

Maybe I don't understand their business model (and very interested to learn), but from where I stand: they are offering just another way to (electronically) transfer funds from a client account to a receivers account using a mobile app.

Basically mobile internet banking as any other banking app, including a bit of accounting on the receiving end (to allow the preparation of annual donation slips).

Did I get this right? If yes - what is their moat? What stops Apple (Apple pay), Pay Pal, Amazon, Google Wallet or any of the credit card companies (to name just a few) to move into this field if the numbers start to look interesting?

Given that their incredible market cap ($475m) is based on basically exponential growth assumptions - where will this growth coming from, given that it is not hard for competitors to move into this market?

Are we sure the emperor is wearing any clothes?

You are very nagative on this company,so why do you bother to post?
you wonder why one of the big boys hasn't got in and gate crashed the party,either they havn't noticed the opportunity,or maybe its easier for them to wait and pick up the leading player once it is a serious enough opportunity, and therefore big enough enterprise to make a material difference to their profits.
I believe this company is on the same path as DIL, Read the numbers! You don't believe what they report?
So far no bigger techie has, or serious competition has attempted to compete,so why worry about that when it Hasn't happened.

[BlackPeter]

You are very nagative on this company,so why do you bother to post?

Sorry - didn't realize you want to turn this into a fan club for cheer leaders only ....

Why do I bother to post? Well, several reasons:

(1) Actually - I was not negative but asked only (I think very reasonable) questions every serious investor should ask herself before investing. Given that some of the people here are holding (I assume) I hoped to get the answers through this thread. Apparently I was wrong, but this is good information as well. Stocks hyped up by people who invest without serious research are highly dangerous ...

(2) I find investor psychology fascinating. Some people gamble their hard earned money away but aggressively attack anybody who dare to have a different opinion about their beloved investments. "Why do you comment if you don't like this stock" is just the beginning. If you don't know what I mean - have a read through the PEB thread. You can learn more about these investors when communicating with them, so consider it in part as experiment ...

(3) I always keep in mind that there are not just old experienced investors around, but as well lots of newbies (many of them not even posting). If the whole thing turns (in my view more likely than not) to custard, than at least I don't want to hear complaints that people haven't been warned. I consider it unethical to see a risk without warning others (who might be effected) about it.

Just for the record - yes, you might be right and this stock might turn into another DIL (but than it might be better to pick the shares up when they are at the bottom - what was it with DIL - 5 cents? Maybe the "faith industry" is that special that they need a different "cash in" app. Pecunia non olet.

More likely however is in my view that this stock goes the way most of the hyped up but half baked tech-stocks go ... and this is a typical peak / bubble profile (and I have no clue whether this stock will peak at WYN's $3 or XRO's $40+). From there however it is more likely to drop .... and the climate on this thread will get more frosty .

For anybody who wants to know more about previous tech stocks - I'd'highly recommend to study the WYN thread, the RAK thread, the PEB thread and yes, why not? - the DIL thread.

[kizame]

BlackPeter you can't base every tech stock on wyn,xro,rak. For instance it has been well known for quite a while that rakon lacked the financial management to make a consistant success of their business particularly for their shareholders. Wyn, geo yep not great, but xro isn't finished yet,c'mon of course people get over optimistic on the near term prospects,but that does not mean its all over,dil came back and did very well for their shareholders.
PPH, you need to give the newbies, (if thats to whom you aim your advice to) ,a chance to also make some money on a very good recent rally in shareprice.
For their performance to date,they excede their projections,and longer term plenty of room to grow further.
No way would we want another peb thread,but also we aren't all Lovers of this stock,maybe some just see great potential to make a buck in the medium term.
You are right though, we still need a balance of opinion. Maybe you could expand on your thoughts as to why you are not that keen on this one.

[Jinx]

Pehaps BP as many others do, sees a company that has had large cash burn with 0 profit at close to half a billion dollar market cap. Hearing those facts is enough to turn many investors off. But to me Pph presents a unique opportunity to invest in a company that is gaining an ever increasing reach within a part of the world that more money then they know what to do with(religious Americans). If pph can deliver on a becoming cash flow positive this year my guess is today's share price will look mighty cheap in 12 months.

[silverblizzard888]

Reponse to BlackPeter -I respect all opinions because at the end of the day none of us know if we have a sure thing or not, its fair if you want to be sceptical about the company given technology companies are risky and all new investors to the scene should be prudent in their thinking, decision making and ultimately their investing. However I think some have found you too aggressive with your scepticism that it feels more an attack with negative connotations rather than a warning to be cautious (if you know what I mean).
--------------------------------

Pushpay so far has been very consistent in what it has set out to achieve and no matter what company you are to invest in that’s a great sign of things going well, especially their phenomenal growth rate and a path towards break-even.

It's not like RAK who have tried to produce hardware (chips) that aren't as competitive when it comes to cost, which was always going to be a losing battle when there are many hardware giants that were already established in their field and in Asian with a cost and scale advantage. Management at RAK also entrenched themselves on all seats of power in the company refusing to take on much change, but things do look like they a slowly changing.

Not like WYN who did not deliver on promises, tried to expand too quick on an inefficient cost base and looked nowhere near break-even, which ultimately broke them.

Xero in my opinion is a success story who have performed well in NZ, AUS and UK, but with some possible struggle with established player Inuit in US, but making ground. You could have viewed Xero as small (in terms of funding) and the minute every other accounting software maker started offering cloud accounting platforms Xero wouldn't not be able to compete on their budget, but they are doing fine. Yes the share price did shoot up beyond what would seemed unreasonable, but sometimes that happens and you'd call the $45 per share crazy, but currently its fairly priced and worth a lot more than when they first started trading on the market worth a fraction of the value.

Its not like PEB who set a forecast of $100 million in 5 years without understanding the market they were trying to get those sales in, which looks like they won't achieve that target unless they get more aggressive in their sales.

PPH has: achieved targets set, restructures management when required (as witnessed recently), understands the market they are selling in and not spreading out on expansion and mainly focusing on the US, so cost have not spiralled out of control and they are on track to break even.
---------------------

They have a very simple business model, they are a payment app and yes you could probably use a banking app that would do the very same thing.

Its unique in that is specialised and concentrated for donations and no other details are needed by the person donating except the Church's name. Face it humans are very lazy creatures and yes you could give them the information to make a bank transfer, but something about it feels like a cold transaction. Theres something much warmer about a donation app and not having to remembering any other details if they are travelling and forget. PPH has even proved that by integrating the app more donations are received, so its pretty hard to argue about the results it has proved with thousands of churches.

However they are creating a uniqueness about themselves now with more addition of user engaging content with the Bluebridge acquisition, which starts deviating away from making just a payment, but also engaging with the content too.

Also annual giving statements can be produced, which for your bank transactions you'd have to deal with the mess of sorting between other transactions too. The say they can cut down the time with dealing with these transactions from 30 hours to just over 5, which itself makes for great time and cost saving if hiring someone to do it. With PPH it only stores donation information and makes like a lot easier for the ones managing the church's accounts. That creates a good point of difference from a banking app too and start creating a moat with the user who finds the app engaging and the Church who have a better collation of information.

As already mentioned today in the investor briefing, theres currently no app competitors in their space competing with them for churches. The big players would likely take on a general solution for the market if they did offer one as they are big and don't need to target a niche group like churches. PPH is a first mover advantage and they are doing a good job making themselves more unique that by the time there are other solutions they are so unique no churches would have any incentive to change solutions.
----------------------------------

As it stands they have 6144 Churches that they offer their service to. There are 314,000 churches in the US, so its fair to say they have a lot more market share they could be capturing to grow and that’s only one country. They can also use the same payment app for charities and businesses, so there is a lot of untapped growth as it stands, they just need to continue to execute as they have done.

Hope that proves I'm a serious investor who considers this company valuation fair.

[iceman]

Have just read through the comments here today. Haven' t had a chance to listen to to presentation yet but just want to say that as a PPH investor who has significantly increased my holding recently, I very much welcome the posts from BP and others who have a different view to me on this stock. That is what this forum is about, sharing differing views. I am glad silverblizzard888 has taken the time to answer BP in some detail and it is a good answer that I fully agree with it. Thanks sb888.

I would add that they have been successful in targeting the large churches, including 5 of the top 10 churches and 30 of the top 100 churches in the US. They have a first mover advantage in a huge sector worth billions, that is only starting to move from cash or cheque to online donations, so as my mate Percy would say, PPH is very well positioned. Online giving is only 24% of donations today and was only around or just over 10% 3-5 years ago. This is forecast to increase steadily. Some of the churches using PPH's platform have reached 40% already.

I would also add that we have some very astute investors that have invested large amounts of money in this company, including in the recent capital raising. They have not been selling. That is a good sign.

Companies like PPH are notoriously difficult to value and it can be debated endlessly what valuation method should be used. I would argue at this stage, while the company is growing at this rate and meeting targets, including towards being cashflow positive fairly early in its life, that price to sales ratio would not be an unusual method to use for a company like this. Then it is up to each investor what multiple they find reasonable.

Having said all that, I think investors have to be extremely careful and only invest in a company like PPH if they are ready for a high risk investment that will no doubt have wild swings in SP. I have researched all the companies PB mentioned (over the last 5-6 years) for comparisons and only ever invested in one of them, DIL. It was a very sucessful investment for me but a wild ride and it sure had its fair numbers of sceptics for a long time on this forum. It was a good debate Sadly it was sold far too early in my view and I am sure the new owners are doing very well with it now.

I have done my homework on PPH and am comfortable with my position. I expect to increase it. It is in the risky part of my portfolio and certainly wouldn't meet the criteria I use for most companies and the largest part of my portfolio. But I encourage people to share their views, both for and against investing in this company. It helps us all.

[Entrep]

Go BlackPeter!

[King1212]

http://www.nzherald.co.nz/business/n...ectid=11780829

[peat]

yes I think the moat is that tithers are sticky. Tithe collectors dont want to rock the boat by changing things that might make the tither payers reconsider.