Probably APTs will prove to be stupidly out of Whack, and makes global tech companies like Atlassian look cheap - $1bn revenue and $10bn market cap.
Putting that aside, in reality, even at its current market cap, ZML is no where near cheap...
While I like its people and tech - they are superior for sure, I still see the following issues:
- They are predicting to double Revenue this year, which will mean they will need to have a $400m+ book to post $50m in gross revenues... once you net out card fees, and the rest its probably $30m net revenue, which is below 10% of book... Also, this will be off only $200m TTV per quarter, which is simply far too low for a business with a $400m book... To put TTV to book into perspective, a business with $400m in receivables should be doing $800m-$1.2bn a quarter in TTV at an minimum... all of which will only net $1.5m profit.
- FY19-20 They hope to have tripled revenue again, which means their book would have ballooned out to $1.5bn, off a meager TTV... This model is well and truly flawed, because theyd need to raise another $200m equity to even get that kind of funding in place... Hence the APT model is proving far more favourable, as they could do comparable TTV with maybe $200m in exposure... All of this, for a net of $6m, off a $1.5bn book? Basically, on a 10-12 PE, that would value this business, at that size at sub $100m.... but with $1.5bn of on average 180 day subprime debt attached to it.
Not quite sure who'd want to throw in $200m equity into a business that will be worth based on PE sub $100m in 2-3 years? This kind of business model requires far higher margins, and a massive balance sheet... @AllFuelledUp@Christos12@dubspec
