PPH - PushPay (Church/donor software.)

[Jinx]

Last 3 quarters they've jumped up 7.7m, 6m and 8.4m ACMR respectively. If we see anything above a 8.4m jump in ACMR regardless of how the sp moves I'll be a happy camper.

Well it wasn't quite 8.4m but I suppose 8.3m is pretty close :P

Now for some interesting math. They are currently sitting at 50.5m, they need to get to 72m before the end of the year. My guess is they average a ~8.5m increase in ACMR every 3 months (quarter) from here, this means next quarter they're at 59m, quarter after which puts us in October we're at 67.5m which gives them 2 months before the end of the calendar year to raise ACMR by 5.5m which happens to be exactly 66% 8.5 (66% because of the 2 months instead of 3 in a quarter before the end of the calendar year). So pretty much if we see anything above 9m ACMR increase in the next two updates then we will get to our 72m ACMR goal by October-ish.

The reason the sp hasn't moved is because this stock has had priced in success since the Xero team started the project. The sp should continue to rise to around $2.50-$3 before October is my guess.

[Pricey]

Just had another read - the definition changes will hugely benefit ACMR over the coming months, and exponentially at the start of next year. Rather than averaging over 12 months, it will simply be the last 3 months of volume fees. ARPM will no longer be dragged down by historical figures. Interesting that PPH no longer feel the need to "remove the seasonal effect" though, which is why it was averaged over 12 months in the first place.

Expect the SP to continue to hover around these levels until US$72m.

[silverblizzard888]

Just had another read - the definition changes will hugely benefit ACMR over the coming months, and exponentially at the start of next year. Rather than averaging over 12 months, it will simply be the last 3 months of volume fees. ARPM will no longer be dragged down by historical figures. Interesting that PPH no longer feel the need to "remove the seasonal effect" though, which is why it was averaged over 12 months in the first place.

Expect the SP to continue to hover around these levels until US$72m.

The view is once the definition changes it will be much more clearer what the present situation is since the averages are dragged down by low historical numbers. I reckon with the definition changes they will get to $72 million by the end of the September quarter, instead of $8 million increases per quarter we will be seeing $10 million or more (50.5 + 10 +12 = 72.5) . As confirmed today in the conference even if there is no definition change they will still achieve their target by year end (50.5 + 8 + 8 + 8 = 74.5).Change of definition means pushing up the quarter in which they achieve their target, changes are happening from 9 months, 6 months, then 3 months ACMR as each quarter passes.

Another interesting part about their presentation where they identify the number of churches in the US of 340,000 but 67% actually have less than 200 users and based on their report their platform is least useful and not too beneficial to these churches and rather its the big ones where the real money is made, so their possible customer number is actually 115,600 and out of that they have captured 5.55% of the market of possible customers and the rest aren't as feasible. If we consider the best customers are just the 1000+ member one's that's actually only 17,000 churches and if most of their customers are in that category already and if they are usually aiming at that list, they have already taken around 38% of possible customers, so less room to grow hence why we see not-for-profits listed as a target category.

[silverblizzard888]

Now that my brains on full blast due to early morning.

I reckon current ACMR when adjusted to 9 months next quarter would presently be $53.8 million, adjust for 6 months ACMR would be $55.55 million and adjust for 3 months would be $58 million

So forecast numbers for next coming quarters.
June - $53.8 + $8.5 = $62.3USD (89.55 NZD)
September - $55.55 + $8.8 + $8.8 = $73.15 *BINGO $72 million ACMR achieved! (105 NZD)
December - $58 + $9.2 + $9.2 +$ 9.2 = $85.6 million ACMR (123 NZD)

Share price (with adjusted ACMR)
June Intrinsic = $2.29 per share
September Intrinsic = $3.36 per share
December Intrinsic = $ 4.10per share

*Just my opinion and should not be relied upon for share purchases!

[iceman]

Thanks for good info silverblizzard888

[BlackPeter]

Just had another read - the definition changes will hugely benefit ACMR over the coming months, and exponentially at the start of next year. Rather than averaging over 12 months, it will simply be the last 3 months of volume fees. ARPM will no longer be dragged down by historical figures. Interesting that PPH no longer feel the need to "remove the seasonal effect" though, which is why it was averaged over 12 months in the first place.

Expect the SP to continue to hover around these levels until US$72m.

Anybody else sensing the smell of a seriously hyped up stock in the air?

"Normal" start up growth companies are measured in P/S ... and this is already a quite risky practice to assess their success. Many of them never see black numbers under their bottom line.

But P/S is not good enough for PPH - they didn't wanted to wait until they have the sales in their pocket (and books), so they use ACMR instead of sales ... which is basically (if all things go well) a measure for next years revenue.

And now they are changing the model to calculate ACRP (which flows into the ACMR) just based on the most recent quarter instead of the committed revenue coming in over the last 12 months. They change as well the definition every 3 months for a year (making the window every 3 months shorter) to make sure nothing will be comparable anymore. Gone are the days where boards still pulled old-fashioned wool over their shareholders heads ...

Obviously - this change in metrics will neither help them to make only one dime more nor to grow only a tiny percentage faster. It just makes the growth numbers in the short term look more spectacular, because it is now measuring every quarter something different ... and it makes sure that their growth numbers can't be compared anymore with any other company nor with historical PPH numbers.

Fishy enough?

What this change will help them is to make their growth numbers in the short term still more outrageous (even if they don't mean a lot) and help them to push up the share price (is that what the "push" in "push pay" stands for?).

Obviously this will only work as long as commitments increase month by month. Expect them to be quick to change their metrics back as soon as new commitments get softer ... though maybe they just take the cash and run ... who knows?

Not sure about you ... but I am avoiding companies which change their most important self defined metrics on the fly ...

Anyway - GLTAH!

PPH-ARPC.JPG

[Beagle]

To your first question NO. For a SAAS company to get to break even in a few years is a remarkable result. Your time is wasted here. If you want to talk about a seriously hyped up stock I would recommend you turn your analysis to XRO.
Look at their growth rate, how many years have they taken and they're still not at breakeven and look at their share price ! You want hyped up, refer to XRO !

[kizame]

BlackPeter I can't really understand why you keep bashing.
You can't buy puts, or sell short this stock so....

[BlackPeter]

BlackPeter I can't really understand why you keep bashing.
You can't buy puts, or sell short this stock so....

Just look at all the tears in the threads of companies who passed their hype peak already ... wouldn't it be nice we could save some people from losing their money?

The first indicators for a coming downturn in hyped up stocks are often when holders start to question any critical voices why they bother to post anything which could hurt the perception of their darling.

I guess let's face it - if you are sure that this company is a goose which will lay golden eggs ... than some cautious voices on this thread are the best thing which can happen to you. Just allows you to buy more of this great stock for cheap.

If you are however not quite sure, than it might be a good idea to reflect on critical comments ... might save your money as well.

In any case ... in which situation would a critical post be bad for you (unless you currently try to sell ... do you?)?

[Bilbo]

Anybody else sensing the smell of a seriously hyped up stock in the air?

And now they are changing the model to calculate ACRP (which flows into the ACMR) just based on the most recent quarter instead of the committed revenue coming in over the last 12 months. They change as well the definition every 3 months for a year (making the window every 3 months shorter) to make sure nothing will be comparable anymore. Gone are the days where boards still pulled old-fashioned wool over their shareholders heads ...

Hi BP. In fact they are correct in saying they have been very conservative with ACMR to date. ACMR is annualised committed monthly revenue - normally calculated by taking the last month (or current month) customer contracted revenue and multiplying by 12. This calculation is easy for the likes of XRO who have a set monthly subscription, but becomes harder for the likes of PPH where they have a subscription fee and an activity fee.

Nothing fishy about it imho. ACMR is just one way to measure SAAS companies and it helps in they all use a similar method for calculating it.