Livewire’s Buy Hold Sell. In this episode, Arden Jennings of Ausbil Investment Management and Tobias Yao of Wilson Asset Management discuss 5 tech -oriented ASX small caps.
Pushpay
Vishal Teckchandani: Last stop, Arden. Pushpay, a payments beast of a different kind. It allows church attendees to donate through their mobiles rather than putting money out and putting it on the collection plate. Processing volumes have exploded since COVID. Buy hold, sell?
Arden Jennings (Buy): Yeah, I think this is a buy, Vishal. Obviously with the onset of COVID then religious organisations, particularly churches, are still for the majority of the cases operating online. Obviously online giving is a key driver for them. They need to receive those collections. And in the US, Pushpay is one of the only providers in the space. So they're taking away what churches aren't necessarily focused on, being administration and church management systems and releasing them to really focus on their engagement with customers essentially. So yeah, we think it's a buy.
Vishal Teckchandani: Tobias, when your total addressable market is every church in the world and the statistics pre COVID are that 90% of donations were cash and check, is this the stock that investors have been praying for? Buy, hold, sell?
Tobias Yao (Buy): Pushpay is a buy for us. As you said, it's a beneficiary of the structure shift to digital and cashless payments. Management has a medium to long term target of $1 billion in revenue. We believe that's very achievable given the total addressable market. We believe the market underestimates the operating leverage in a payment processing platform at scale. Pushpay also has a very healthy balance sheet, which they can deploy into acquisitions. So it's a buy for us.
Other companies discussed in the linked episode; Sezzle, NextDC, Redbubble, Megaport.
https://www.livewiremarkets.com/wires/buy-hold-sell-5-tech-small-caps-with-massive-addressable-markets
