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$4.83 elmo software limited

News: ELO Elmo Software Says Pro Forma FY20 Revenue And EBITDA Guidance Is Re- Affirmed, page-8

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flight11

3,974 Posts.

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04/01/20

16:26

Post #: 42225478
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Originally posted by duncenation ↑

This is from a September newsletter from Lakehouse Capital. A bit old but given the pace of ELO threads on HC it is still of interest.

turning to ELMO Software. The Fund initiated its position at the company’s IPO at $2.00 per share and has done quite well with a total portfolio return of 145.6%. The position has been progressively reduced throughout calendar 2019, though, due to the combination of a full valuation and concerns about worsening reinvestment economics amplified by increasing marketing spend. We were tolerant of these issues, albeit on a reduced position size, but decided to part ways following the recent growth-centric $55 million capital raise and $35 million selldown from founders and early investors. We could see revisiting this thesis in the future as ELMO has good bones in the form of a loyal and diverse customer base, however, we would want to see greater rigour and proven success on the accelerated growth plans before revisiting.

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We need to see solid revenue performance in the next quarterly at end January, given the spp will have bolstered working capital for customer acquisition activity.

ELO Price at posting: $6.50 Sentiment: Hold Disclosure: Held
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