What are everyone's thoughts on investing in this?
For me it is important to draw comparisons to its closest ASX listed rival, Cash Rewards (ASX: CRW). Please note that CRW has recently received a takeover offer valuing the company at $89m.
Details
MRI
CRW
1
SOI
206m (based on max subscription)
79m
2
MC
$41m (based on $7m IPO raising)
$89m (based on $1.135 per share offer)
3
Cash on Hand
$7m
$13m (based on latest 4C)
4
EV
$34m
$76m
5
FY21 Proforma Revenue
$27m
$22m
6
Revenue per number of users
$5.86
$22
7
EV/Rev
1.26x
3.45x
8
MC/Rev
1.52x
4.05x
9
Users/EcoSystem
4.6m members 4,500 merchants
1m members 1,700 merchants
Few different things to consider here, remember this is only my opinion, not factual in any way. I can't predict the sizzle effect that may be built into the price when it IPOs
I am using the EV/Rev multiple which to me seems like the most reasonable metric based on the above information. I think a 4x multiple of revenue might overvalue MRI, so factoring in the cash on hand in CRW brings it back to a more reasonable comparison.
So if I apply CRW's EV/Rev multiple that should calculate out to a $93m valuation ($27m x 3.45). Based on that this would give the MyRewards business a $0.45 per share valuation based on proforma historicals.
Other considerations:
Pre-IPO is getting a 33% discount to IPO price, this may hang down the share price
There are various options (17m) on issue that may hang down the share price.
Business may not scale in the manner or pace they are claiming
