You make a good point. There are no good comps on the ASX. Globally there aren't very many similar sized (mkt cap) comps even in the payments space, as it has been consolidated.
Wirecard AG is probably the comp you'd consider at maturity (a novel term given they are growing at 20% on a EUR20b mkt cap), they are an outsourced payments company in the low risk merchant space.
But Wirecard is a massive annuity stream and thus the 50x PE multiple. ISX will get a growth multiple, not a stable earnings multiple. So again difficult to price.
I dont think Paypal or Wirecard are great comps as they play in the low margin, highly competitive retail space. Although these markets are open to ISX (as is BNPL) they have clearly expressed a focus on high risk merchants given their USP and the margins achievable.
A more reasonable (?) valuation methodology might be to price up the size of the addressable market and the expected penetration they can get (in terms of GPTV), the multiply that number by an EBIT margin and give that a multiple less a discount factor. What that multiple should be is anyones guess.
ISX Price at posting:
$1.19 Sentiment: Buy Disclosure: Held
