Livewire Article, page-4

Great buying at that price @yellowfin! My average buy-in is higher than this (~$0.30) as I only started looking at ART more recently.

I agree that ART seems to remain very 'under the radar' for how bright the potential future could be. It appears to be a business that has huge 'network effect' potential and has arguably already achieved this in Australia (i.e. now very difficult for competitors to compete in ART's niche in Australia).
- Tim Fung's media partnerships plan to accelerate overseas expansion appears very intelligent in this context.

My thinking broadly is that a possible outcome involves successfully spreading the Airtasker platform across the UK and US (~10-15 times the size of Aus market), and then the rest of the world (likely at least 20-30 times the size of the Australian market overall).

This outcome would result in annual revenues of ~$1B. I also expect the EBIT margin would grow materially from the current Australian experience of ~25% as a large component of current expense profile is relatively 'fixed' (head office etc.).
- A hypothetical EBIT margin expansion over time from 25% to 40% would mean ~$400m annual EBIT.

In my mind, the key questions relating to this possible outcome:
- How likely is this outcome to occur vs. 'Australia-only' success vs. success in some parts of the world but not others?
(i.e. assigning a probability to the optimistic scenario)
- How long is it likely to take?
(i.e. need to discount this possible future back to today)
- How much advertising spend is likely to be required? And, will the interim underlying profitability adequately cover these advertising costs?
(i.e. are the outcomes of the Channel Seven spend of ~$25-30m during 2016-2019 reflective of future ad-spend outcomes overseas?)

I believe definite answers to these questions are unknowable, however, I am convinced that the market is currently assigning a very low probability to the possible outcome of significant international success.

Dominant platform businesses are typically 'winner-takes-all' (or at least vast majority) and get priced accordingly once the market recognises this.
- REA comes to mind priced at ~18 times 2024 revenues (market cap ~$31B / revenues ~$1.7B).

Interested to hear others thoughts

Disclosure:
One of my largest share holdings as I believe the current price dramatically undervalues ART
DYOR if interested - this is not intended to be investment advice