1ST Group in 2025 (5-Year Predictions)

The key to unlocking wealth in the stock market is changing your mindset to stop renting stocks and start owning businesses. I find that most investors say they focus on the long-term but very few actually practice it. Focusing on the long term is hard because it is counter to our human nature that craves action and immediate gratification. The truth is that short-term thinking paralyzes your returns. If your goal is to achieve maximum capital gains, then your intention with every purchase should be to hold for years.

Look at Warren Buffett’s holding period compared to the average US investor:

• 
• 

Many try to misrepresent buy and hold investing as buy and forget. Nothing can be further from the truth. The best long-term investors conduct constant maintenance due diligence to reinforce their long-term investment thesis. Their edge in investing is finding great companies early and knowing them better than most. This deep understanding of what they own gives them the conviction to hold.

So, let's take a look at my 5 year ARR and share price forecast for 1ST Group. I'm being brutally honest with this forecast. No hype, no undue optimism, just predictions based upon historical performance and the market growth rate of online bookings. In a further post, I will show you how I have triangulated this based on the TAM.




So what does this assume?

• ARR represents the value of all recurring monthly revenues in a month normalised to a one year period. ARR includes all revenue streams that are reliably recurring on a monthly basis
• I assume that the YoY ARR growth rate climbs in line with the historical average but declines over time due to the nature of compounding growth; the larger the organisation the more challenging it is to maintain the same growth rate
• I assume a modest ARR multiple of 4-5x, let's be honest; YoY growth of 25-30% is deserving of a 5x multiple, but not a 10x multiple

Some will say this is a conservative forecast. It yields a 16c share price within 5 years. On balance it may indeed be conservative if 1ST Group can achieve any of following over the next 5 years. Any of these may truly open up the floodgates for the share price, but are by no means guaranteed:

• Truly leverage data analytics and advertising revenue in a meaningful, mutually beneficial and large scale manner
• Cultivate the network effect on their platform and drive significantly higher levels of traffic than the platform currently experiences
• Expand into additional geographies

You will have an edge on most investors if you make investments based on expected 3-5 year returns instead of 12-month returns. 95% of investors are investing for the next quarter or two, not the next few years. If you can train yourself to think in multi-year time horizons it frees your mind to think more clearly. Investing is one of the only art forms where opportunities and decisions become clearer when you look out further. There is a high degree of farsightedness in successful investing.

To achieve a multi-bagger in the portfolio, you have to hold a multi-bagger. Don’t bother finding the next multi-bagger if you aren’t going to develop the conviction to hold it. Only after you hold onto a great company as the stock goes up 5x do you realize how wealth is truly created.

Good luck team,

T.E.P.