Australia's largest stock trading and investment forum Australia's #1 stock forum

1PG 1-page limited

0.00%

16.5¢

Andrew they have taken in 4 mill booked revenue in 2 months...

First 93 Last

Share
Profile

Follow
arryd

375 Posts.

1

22/03/16

12:24

Post #: 17335948
Share

Originally posted by Andrew1234 ↑

I would like to add a couple of points...to take or leave (just thinking out loud about this).

The reality is, no-one (not even management themselves) know how this is going to turn out. The best intentions are there for it to be a major disruptor in the HR space - and there is some potential for that for sure.

But...this is early days.

The reality though, is that while the share price has come back near what appear fair levels - there are questions that need to be answered (sure you can close your eyes, jump in and hope it pays off). But the question is really just about one thing - revenue and the speed of that revenue growth.

Last year, they were throwing around figures of revenue of up to $25 mill run rate at end of 2015. If that had come off, and they were running at say $7.5 million revenue this quarter, the share price up around $5 while heady, may have been almost justified (with such extreme revenue growth). That is what the market was expecting, and I am sure many brokers understanding the hype pushed it for all it was worth.

I was one of a few around that level that sounded the alarm on here (to some rebuffs) but that is beside the point. I just could not see why it was worth paying $5 when there was virtually no revenue.

Now - the price has come back and with close to $50 mill cash there is certainly support coming in

But...they are now talking about burning $24 mill a year in expenses. This is what makes me very nervous buying back in. With perhaps a revenue run rate around $5 mill a year there is quite a gap there...yes you will argue they have the cash...which is true - it gives them about 24 months breathing space...

But even at this high market cap, they have to not only increase revenue, but increase it strongly quarter on quarter - at enough of a speed to justify paying out this type of premium for a loss making enterprise

Just look at how slightly similar companies like NWZ or UNS have gone when they decide to dial up the expenses into the hope of revenue - sure they are not SaaS companies...but the premise of the operating model is similar

You can make alot of noise with $24 mill a year...but you need to come up with returns as well...

I am not saying 1PG will end up like them, I hope they don't and they do have some very very promising clients. But you have to be aware of outcomes - the worst case ones could be very considerable loss even from these levels.

I guess, just realize whether you are investing or punting. I think anyone on here getting set for the long run is probably punting IMHO.

As I mentioned, like the story...hope it does well... need to see more to risk any hard earned $ (learned to be cautious the hard way over the years)

Expand

Andrew they have taken in 4 mill booked revenue in 2 months alone and expect substantial uplift in revenue this year. This bodes well for covering the cash burn.

1PG Price at posting: $1.20 Sentiment: Buy Disclosure: Held
4 Upvote

0 Great analysis

Reply

Top Stories

SGQ

Traders watch with interest as St George Mining reveals REE hit

HotCopper Trends: Final day of quarterlies; Larvotto FID & more

LRV

Larvotto hits "go" on Hillgrove Project

WC8

Investors shrug as Wildcat's latest lithium drill hits fail to excite

SS1

Sun Silver unveils Maverick Springs assay results

First 93 Last

Add to My Watchlist

What is My Watchlist?

A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.

Andrew they have taken in 4 mill booked revenue in 2 months...

Top Stories

Traders watch with interest as St George Mining reveals REE hit

HotCopper Trends: Final day of quarterlies; Larvotto FID & more

Larvotto hits "go" on Hillgrove Project

Investors shrug as Wildcat's latest lithium drill hits fail to excite

Sun Silver unveils Maverick Springs assay results

Featured News