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12/06/19

11:22

Post #: 39016387
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Originally posted by Dwhale ↑

Thanks JP for all the questions, not familiar with Get Swift, I think you are reading into things a bit too much and made some assertions real or imagined, but it does beg the question of comparing with apples with apples, comparing relative valuations

I agree with your previous post that just because a CEO says they are not going to raise it doesn't mean they won't. I think that was very astute observation and proven right time and time again.

So if we take company ACME Tiles that does not offer a free-trial and the client leaves then this would show up in a customer churn or revenue churn calculation; but in LVT's case the free trial is excluded from churn after the company does not take up the post trial offer so these trial customers are excluded from churn or never included in the calculation almost like an 'adjusted churn'. So which is the better quality company?

And the second point wrt the distinction between committed and contracted. As the poster High Returns commented, "difference between committed and contracted are the minimum and maximum values". As far as my limited knowledge is aware LVT appears at least to be the only SaaS company that uses this term committed. If committed is the lower value then is it right ascribe the same valuation multiple to committed revenue as to contracted revenue, particularly as SaaS companies are often measured on LTV (life time value). Should you attach the same premium to committed than to contracted?.

As I have previously said, there is a time to buy this company but my feeling is:

- they would need to have two budgeted months of cash in the bank
- monies for R&D and working capital/ provisions and unforseen
- with the shift to building software now some additional cash

Call it say $6m cash to run the business on B/S, so a deeply discounted raise that gets them to break even is a highly attractive entry point in my view

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Personally I find LTV a rather rubbery figure. Small changes in churn can have a very large impact on LTV, and it assumes the status quo will continue, and it never does. A low churn business projects LTV (revenue) a long way into the future, and unless you have a very serious competitive moat it can all look rosey...
...until it doesn't.

LVT Price at posting: 44.5¢ Sentiment: Hold Disclosure: Held
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share price, page-323

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