1ST ASX Valuations, page-8

Hi everyone - hope everyone is staying safe at home or in their trees (@JayMarket).

Re-posting my current thoughts on valuations in this, more appropriate, thread and keen to hear others thoughts @T.E.P. @lordearl @stardestr0yer et al.

I'm applying a roughly 9 month horizon here (out to 2020 calendar year end) and consider that short term.

The table shows options for growth rates of 5%, 10%, 12%, 15% and 20% a quarter moving forward. The ARR multiple applied will of course substantially change the SP outcome. Prior to CV-19, strong SaaS businesses on the ASX traded towards 10x multiples. I'm not sure we'll see these multiples post CV-19 (at least in the immediate term) so have dialled these back and applied a more conservative starting point at 4x for 10% quarterly growth (just under 50% CAGR). Note, on Q2 4C cost estimates we won't see positive cash flow this year under less than 15% quarterly growth. But costs are likely to decrease in the short term under the current climate, which will help on this front.


*using current SOI of 424.6m units.

My target for Q3 results (due end of the month) is $5.5m arr (with some on-boarding and billing luck) - right on 12% growth for the quarter. If sustained, ARR will be on the cusp of $8m by January 2021 reporting. A SP perhaps pushing towards 10c.

Q4FY20 will bring challenges as the effects of people delaying their pet, optometry, dentistry appointments materialise. But this could be offset by increased psychology bookings and innovations with tele health appointments (a further announcement on the cards soon? Here's hoping). Q1FY21 may be a strong quarter as the curve is flattened and things start to return to a greater sense of "normal".