@jamwolf I agree and disagree about valuation to some extent....

@jamwolf

I agree and disagree about valuation to some extent. Companies with organic annual growth of 40% typically trade at lower multiples than this is what I was saying.

BUT- rent has only just started monetizing the user base so this growth may increase and the EV multiple is substantially lower than the mcap multiple.

Just a few things to put out there:
1) total addressable market
- assuming 2m households average tenancy 3 years gives approx 700k turnover of households p- a 10% market share of this only equates to 5.25m which could justify a valuation approx 3-4x current mcap. They already have 50k renter resumes! (I do think the average tenancy is mich shorter but haven't actually looked closely)
- to be a massive multibagger (which is my aim) they will need to export the model overseas AND build up the market cap to avoid a takeover by REA (I think if this is gaining traction there is a high probability of an early opportunistic takeover).

2. Business strategy
- I think the $75 fee actually is a win-win for rent. Previously they were hawking building up the private landlord market but now they are no longer competing with agents- this increases buy in. When you factor in the due diligence from renter resumes etc there will be a natural shift to RNT. With no listing fees they should increase the base organically. I really like this model and can't see any reason for it to fail. The likelihood of a renter closing the deal via RNT is much higher with the renter resume product compared to other listing sites. Moreover there isn't that strong an incentive to copy this model imminently as it is a small consideration for REA and it won't hurt their financials initially.

The main risk is that this is still easily copied by the big players - I do think however a focused management team on a niche product should win in the longer term.