Right- new poster but everyone here is missing a couple of key points around RedBubble:
Yes sales are down (though underlying once you strip out masks is pretty close to breakeven). But this isn't a stock specific thing. Everyone in this sector is having a rough time due to a combination of a couple of things):
- Really tough comparables. RBL had a real covid boom, which gave 12-18 months of really great growth. So they're up against some really tough YoY numbers (hence quoting the 2 year numbers which show decent growth still).
- Apple's privacy changes- have had a sizeable effect on ability to cost effectively advertise, especially to high spending demographics with iPhones. Lots of businesses in the sector affected by this too
- General economic weakness- again lots of pressure on discretionary spend, and t-shirts and stickers are the first thing to get squeezed here.
But- you need to take a view on to what extent these changes are transitory, and whether RedBubble is in a good position to weather them. My thoughts are:
- RBL very well diversified internationally
- Use of multiple fulfillers to make the end product gives them ability to squeeze/minimize increase in input costs
- Huge number of artists/artwork on the marketplace is very hard to compete against
- I also note that today they've announced an impending 10% accross the board price increase which should help them maintain margins
Then to get to valuation.
- $90m of cash on the balance sheet at what is around the seasonal low
- Market cap of $313m, or $223m if you strip out cash. So trading at perhaps 0.5x revenue. A ridiculous number compared to Etsy, Wayfair etc
- I expect profitability to bounce back as we come up to Christmas this year (remember this is a very seasonal business, so a lot of profit generated over calendar quarter 4)
The stock is currently priced as if it will never grow again. I expect it to rerate when either:
1.) Year on year growth returns
2.) Acquisition talks start, or company explores listing on a US exchange. The loyalty to the ASX while commendable is really holding back the valuation of this business.
My target price here is $4.
- Forums
- ASX - By Stock
- ATG
- Ann: Trading Update
Ann: Trading Update, page-10
-
-
- There are more pages in this discussion • 9 more messages in this thread...
You’re viewing a single post only. To view the entire thread just sign in or Join Now (FREE)
Featured News
NEWS
Exceptional lithium assays uncovered at Falcon Lake – expanding mineralisation, big potential ahead
NEWS
First paediatric clinical site activated – major recruitment milestone and key appointment announced
Add ATG (ASX) to my watchlist
|
|||||
Last
40.5¢ |
Change
0.010(2.53%) |
Mkt cap ! $114.1M |
Open | High | Low | Value | Volume |
39.5¢ | 40.5¢ | 39.0¢ | $120.3K | 301.4K |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
1 | 2000 | 38.5¢ |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
40.5¢ | 192632 | 1 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
1 | 2000 | 0.385 |
1 | 5500 | 0.380 |
2 | 14000 | 0.370 |
2 | 15888 | 0.365 |
6 | 269617 | 0.360 |
Price($) | Vol. | No. |
---|---|---|
0.405 | 192632 | 1 |
0.410 | 2025 | 5 |
0.415 | 500 | 1 |
0.420 | 24132 | 2 |
0.430 | 12500 | 1 |
Last trade - 16.10pm 12/09/2024 (20 minute delay) ? |
Featured News
ATG (ASX) Chart |