PPH - PushPay (Church/donor software.)

**sb9** · 17-07-2017, 10:49 AM

Originally Posted by King1212

Will be a while before reaching that. Too many people under water. A lot of people bought in around $2 up...remember last IPO oz

Yes, $2 mark is very key test point imo. If and when it gets there, I guess a lot of holders who got in around that price originally might want to derisk and there'll be bit of selling pressure around that level. Once we're pas that period, I expect the sp to settle around mid to high $2...

**sb9** · 17-07-2017, 10:51 AM

And we've ASM coming up tomorrow, would anyone attending from here be kind enough to post their thoughts pls.

**bulyak** · 17-07-2017, 11:11 AM

Interesting comeback. OK, if you factor in 273 million shares on issue post placement then it looks more like a share price of about 2.89 once they reach the ACMR of 100 million. So I'm happy with the $2.70 share price you refer to. I stand by the 7.9-8 multiplier. Their quarterly report says that ACMR is 62 million, but take your point that a component of that is variable based fees. Hence the reason for the Gross Margin at 55%, (should be above 70% for a B to C - typical SaaS. The multiplier gets penalised for this. What I like is the 70% plus growth for this type of turnover. with 95% plus customer retention. As long as they can keep that kind of growth occurring then I feel the multiplier of 8 applies. Yes the cash burn is a concern but acceptable as long as the growth continues. But the minute that growth stops they better have the cash reserves in place to support their strategy. This is a big market they have found, easily over 1 billion. The Yanks like to donate, especially when it comes to the higher powers.

**sb9** · 17-07-2017, 11:28 AM

Current depth on ASX looks very interesting, if that was to be true and not staged by anyone a definite breakout looks to be imminent...we shall wait and see.

**winner69** · 17-07-2017, 12:05 PM

Originally Posted by bulyak

Interesting comeback. OK, if you factor in 273 million shares on issue post placement then it looks more like a share price of about 2.89 once they reach the ACMR of 100 million. So I'm happy with the $2.70 share price you refer to. I stand by the 7.9-8 multiplier. Their quarterly report says that ACMR is 62 million, but take your point that a component of that is variable based fees. Hence the reason for the Gross Margin at 55%, (should be above 70% for a B to C - typical SaaS. The multiplier gets penalised for this. What I like is the 70% plus growth for this type of turnover. with 95% plus customer retention. As long as they can keep that kind of growth occurring then I feel the multiplier of 8 applies. Yes the cash burn is a concern but acceptable as long as the growth continues. But the minute that growth stops they better have the cash reserves in place to support their strategy. This is a big market they have found, easily over 1 billion. The Yanks like to donate, especially when it comes to the higher powers.

Listed SaaS companies with Push growth and margin profiles trade at 4 to 7 times with a median around 5.5 times

Why should Push be near or better than the top of the range?

**MikeE** · 17-07-2017, 12:17 PM

What listed SaaS company has Push growth?

**bulyak** · 17-07-2017, 12:31 PM

Yeh, fair question. I agree that the median for SaaS companies is usually around 5.6, which are publicly traded. It would appear that Xero has created a benchmark on the NZX. So why not use them for this exercise. Their growth is about 45% at the moment. Through in a couple other factors like gross margin at 75% and cash burn reducing dramatically and total market potential being in excess of 1 billion and you have a multiplier of about 9.7 times the ACMR of 350 million last I checked via their annual report (probably a bit higher since their annual report was release a month ago) and you come at a market cap of about 3.5 billion. So one would say their share price of 25.5-26 is about right. As sb9 has pointed out. There is not another SaaS company with the same turnover that is meeting the growth rate the PPH is having at present. If they could improve their gross margin and reduce the cash burn, then I feel the multiplier would increase.