Is 1-Page going bust?, page-62

First 62 Last

Share
Profile

Follow
8horse

34,515 Posts.

9485

02/06/16

20:40

Post #: 17938497
Share

Originally posted by TheLittlePrince ↑

The company lost $2.7M due to unnecessary forex risk. They had $24M in USD denominated treasury bonds plus cash reserves. Hedging strategies are lacking and this risk is not worth it in the low rate environment.

I have not conducted much due diligence on this stock and it has only taken my attention recently with the quarterly announcement.

Remember they may (most likely) be eligible for the R&D tax incentive which will provide tailwind for the cash burn problem.

The main problem I see here is the churn rate! I am not sure exactly what 'Source 3.0' is as I have not conducted much due diligence on this company however I note "customer feedback on the updated sourcing solution is positive and customer retention remains high at 90%". I assume this is a quarterly figure in which case the churn rate is 3.232% per month. This is a dangerous churn figure for an enterprise level SaaS company.

The highest correlated factor to post-money valuations of listed SaaS companies is not total revenue or revenue growth, but negative churn. Revenue growth correlates to post-money with a 0.18 R^2. Revenue correlates at 0.3 R^2. Negative churn, or account expansion, correlates at 0.54 R^2. Accounts have been expanding but at a slow rate relative to churn.

Especially as. if what they say is true, sales are focused in coming quarters they need to fix this issue otherwise it is shareholder funds down the drain.

Shareholders,

Expand

Interesting, where did you get $2.7m forex exchange loss???

According to the last quarterly report, forex change loss ($551k).
They did make forex gain last year of $364k.
So, net forex loss was ($187k).

Regarding Hedging, as they are mainly operating in US, so holding USD denominated bonds, basically they are hedging.
Hope that helps.

1PG Price at posting: 47.0¢ Sentiment: None Disclosure: Not Held
2 Upvote

0 Great analysis

Reply

Top Stories

ASX Market Close: Fading miners drag bourse as iron ore price slumps | July 25

Friday's HotCopper trends: Renascor concentrate, Larvotto raise | July 25

Most investors will get this earnings season wrong. Will you?

ASE

Astute delivers high-grade lithium hits at Red Mountain

SGQ

St George banks $5M from placement to ramp up Araxá Rare Earths Project

RNU

Renascor produces graphite concentrate at Siviour, right on time to meet ex-China demand

Rokeby, BHM, more: The 10 hot stocks HotCopper users watchlisted in Week 30

FTL

Firetail scoops up untested land around Excelsior – including juicy mineralisation target

Listen: HotCopper Wire Podcast 019 – Dreaming of the 9,000s

What is going on here? Watch out for DroneShield, Pure Hydrogen, and Nel ASA

First 62 Last

Add to My Watchlist

What is My Watchlist?

A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.

Is 1-Page going bust?, page-62

Top Stories

ASX Market Close: Fading miners drag bourse as iron ore price slumps | July 25

Friday's HotCopper trends: Renascor concentrate, Larvotto raise | July 25

Most investors will get this earnings season wrong. Will you?

Astute delivers high-grade lithium hits at Red Mountain

St George banks $5M from placement to ramp up Araxá Rare Earths Project

Renascor produces graphite concentrate at Siviour, right on time to meet ex-China demand

Rokeby, BHM, more: The 10 hot stocks HotCopper users watchlisted in Week 30

Firetail scoops up untested land around Excelsior – including juicy mineralisation target

Listen: HotCopper Wire Podcast 019 – Dreaming of the 9,000s

What is going on here? Watch out for DroneShield, Pure Hydrogen, and Nel ASA

Featured News