NOV 17.4% 5.4¢ novatti group limited

So, the disclosure of gross transaction volume (GTV) is...

  1. 275 Posts.
    lightbulb Created with Sketch. 31
    So, the disclosure of gross transaction volume (GTV) is interesting. This is the first time I have seen it messaged so plainly.

    From the chart, looks like they are around $1B for the quarter, or an annualised rate of $4B.

    Comparing with a couple of other payment processors -
    * Pushpay has traditionally traded at 0.1x - 0.3x GTV, and their takeover offer is at ~0.15x most recent GTV. Their revenue is mainly software based. Growth is minimal, but a 'sticky' customer base in a niche.
    * Tyro disclose their GTV regularly, and are currently sitting at approx 0.074x GTV, having bottomed out at around 0.035x GTV. Their revenue is a mix of software and hardware (terminal) based.

    Novatti is sitting broadly at 0.025x (even after recent upswing in share price), so again - as we all know - looking pretty cheap on a GTV metric assuming they can keep scaling at a decent rate.

    It would be very easy to justify a Tyro-level metric (3 x current share price, even without adjusting for a good portion of their market cap being cash and investments).

    I think it would be harder to justify a Pushpay level price, as there is more work to do on becoming cashflow positive plus (more importantly) demonstrating that they are building some niche products / an economic moat that justifies them being rated higher than any other commodity payment provider.

    Bottom line - lots of headroom to run at current price, but somewhere above $1.0 per share starting to look expensive if not demonstrating some unique characteristics.

 
watchlist Created with Sketch. Add NOV (ASX) to my watchlist
arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.