@Compulsive
The short answer is no. The long answer is Afterpay may be an unusual exception. I would suggest strongly to be careful vetting people on hotcopper- my experience is that there are very few high-value honest posters around.
The things to concentrate on are:
1) top-line/revenue growth rates- what is driving them at the moment and whether they are sustainable in the long-term. (Given Afterpay is entering new markets, penetrating markets deeper with in-store and hasn't monetised data or advertising on the platform yet, the runway is clearly very long)
2) margins ex-growth
You should then focus on trying to identify a good proxy or leading indicator for (1) and read the report closely for figures relating to (2)
You should try to work out what the assumptions driving the various price targets are and whether they can be beaten. Try to get hold of a broker report (Bells or Goldman's) and you can see how the market is deriving values.
For instance Bell's $21 12 month price target is predicated on revenue of 203M and 325M in 2019 and 2020 respectively. Using a 4.1% gross margin, that implies TTV of 5B in 2019 and 8B in 2020 (ignoring pay now business).
You should take a guess at what you think the figures are going to be at these timepoints and assign probabilities to them which will give you different valuations. If you estimate that there is a very high likelihood of beating these estimates there is a very good chance of the share price rising above these targets.
So simplistically:
-if you buy at $16.50 and want it to rise to >21 over the next 12 months, you should have high conviction that the trailing sales at end of FY19 are greater than 5B.
- if they release July US figures next report you can take a guess as to what the US FY2019 sales figures are going to come out at, and guess the Australian figures a lot easier from the publicly available information.
The one point I have
repeatedly made is that the
customer acquisition costs for APT are out of this world- they are literally the lowest bar anything that I have seen bar google and facebook (APT are lower than Uber, even PayPal in its early days, transferwise etc)....they don't even need to pay for a referral program to get to 2.2M users in Australia in 2yrs from a standing start- there are very very very
few businesses that can do this.
If you buy at any price, and you don't have a good idea of why you are buying at the price you are, you will end up selling at an inopportune time when doubts surface or the share price drops. The real money is made by getting something right, and holding on for a long long time. Suggest you advanced search the AFY/TCH/APT threads for posts by permabear, webllinks, christos12,vboy and also read posts by valuetrader82, dubspec, moreld for some of the bear points over the last 2.5 years to have some context as to what people have thought/are thinking here. There are many of us sitting on 5-6 bags already and who haven't sold a single share, and many in fact who have averaged up in this time (myself included).
Some of the good published theses are available from Gary Hsui at CVF (go through the monthly reports if you have to) but I think he wrote a good article a couple of years ago on livewire, findthemoat (if its still available).
Finally on your last point- if you take Australia only, based on guidance we are looking at scale already being exhibited with half on half improved EBTDA margins of 11% to 19% (based on guidance- which is ridiculous in itself- I have never seen anything like this before in the growth phase of a company), the mature margins are going to be 30-40%. They should be able to double sales to 5B next year and using the midpoint margin of 35% you get an EBTDA of about 72. Using a multiple of 50x (which assumes growth >50% for another year) and you get roughly the current share price. The problem with paying for growth is if the growth does not hit, you get both the drop in revenue from the headline drop and you get rapid and severe multiple contraction. Eg if you ended up with 4.5B in sales the multiple may drop to 25x and you get a >50% drop in shareprice! On the plus side, Afterpay has beat mine and most others' estimates every quarter for >2yrs straight, and most of the time fairly significantly.
