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lordearl

1,753 Posts.

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28/02/20

14:05

Post #: 43215473
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Originally posted by ValueSearch: ↑

I think the problem here is expectations management. Just topped up @ .037, half the price of the stock just before the last 4C. Nothing much has happened since then. Corona has put a dampener on all stocks (10-15%). Management announced new deals last Q and did not set expectations that for the most part they were referral deals, i.e. there is no ARR until sites have been up and running for a while and referrals start to flow though.. I think investors reasonably expected once the sites were up the ARR would flow. As that didn't happen management is paying the price for it now. The essence of a SaaS business is that cash burn is tolerated whilst ARR and revenue is growing and a path to profitability can be seen. There is little tolerance when either of these are not met.
Also last year management guided that breakeven was a priority, then suddenly changed their mind to ARR.
I am wondering if they haven't yet figured out the product/market fit for each segment and this is a stage 2 and not stage 3 SaaS company.

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Agree with this and the critical thing to understand here is that this is a blended intermediated distribution - they are improving workflow between businesses as well as between consumers and businesses. Because of this the groundwork in the software programming can be lengthy.

The revenue streams will end up being quite diverse, but the customisation will take time.

Possibly the SP got ahead of itself but if the 2H is strong the rebound should be even stronger.

Last edited by lordearl: 28/02/20

1ST Price at posting: 4.2¢ Sentiment: Buy Disclosure: Held
1 Upvote

0 Great analysis

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