$1 Club, page-26560

@LJohn

Revenue multipliers for this sector are shot through the foot. Unfortunately a x10 multiplier looks pretty high right now - look around the sector.

Remember, when you consider IOU’s $10m annualised revenue, a large chunk of this is legacy iSentric stuff. Now, look at the past financials. People on these threads get all excited about the growth in the iSentric digital transactions (“but we aren’t just BNPL!” etc - as I also used to say), but the fact is the market puts almost no ‘value’ on this side of the business. It’s essentially just back office bank/insurer transactions; it doesn’t carry the same value as embedding oneself in a customer purchase decision, the way Afterpay has. Don’t believe me - go back through the old financials (as I have) and work out the revenue multipliers for yourself, for the legacy ICU business from 2015-2020. The highest it ever got was 1.34x and the lowest was 0.17x. If you can’t be bothered, I’ve already broken it down here:

https://hotcopper.com.au/posts/57811741/single

The reality is, given BNPL is (currently) so out of favour, and ICU never achieved any revenue multiplier of significance, I think one has to be extremely careful saying “we look cheap at this point”. You could argue the opposite - 3.5x looks fairly expensive at present, when considering the pre-BNPL record.

When you start considering this sort of perspective, the SP action makes a lot more sense, rather than the tired old “insto manipulation” line, which I see all over HC threads on struggling micro caps.