It will be interesting to see how PPH penetrates the Catholic churches. There is no formal tradition of tithing in the Catholic archdiocese, so it is possible that the donor function may not derive significant processing revenue?? However, Catholic churches are generally bureaucratic in nature and slow to change. If PPH can successfully penetrate Catholic churches with the ChurchStaq offering, it could be extremely sticky and offer a stable (and growing) subscription revenue stream for years to come (you could probably say the same for Protestant churches).
As the subscription revenue is only about 25-30% of total operating revenue, I think this is where we may see the most growth over time. The drive to penetrate the Catholic churches should drive subscription revenue growth as opposed to processing revenue for the reasons I suggested above.
Having said that, and after speaking a few other fellow investors, there appears to be a perception that PPH is just another BNPL company. In my opinion, PPH as it exists today is a lot more similar to say a XRO than a BNPL company, especially with the ChurchStaq offering.
Even though it's current multiple is looking rather high at ~50x, its trailing EV/EBITDA is relatively low at ~30x for a growth company (by comparison XRO's EV/EBITDA is ~272x, APT is ~800x).
I wouldn't go so far to say that PPH is massively undervalued, but I think there's a long runway for growth, and today's price seems like a buy to me
Happy to hear further thoughts, even if it totally trashes my opinions above.
GLTAH!
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