My issue with CAB is revenue is collapsing. If for FY18 you assume 5% clip on all payments, 20% market share loss to Uber (probably conservative) and even no additional market share loss to Ingogo etc, the payments business is only doing $40M (down from $76M in FY15. Taxi services at 20% market share loss to Uber drops from $92 to $74M. Admittedly this is simplistic as some areas will be more sticky, but some areas like plate rental as we saw yesterday will be disproportionately hit, so probably not a bad assumption.
This takes total revenue in FY18 to $114M (it was $188M in FY15).
There is no bus revenue anymore so the $114M revenue is up against $126M in costs. Sure they will try and slash costs to match the declining revenue, but what if Uber hits 30% market share or the 50%+ share Uber/Lyft have in USA?
CAB Price at posting:
$3.55 Sentiment: Sell Disclosure: Not Held
