I only got a small allocation in the IPO but picked up a lot...

I only got a small allocation in the IPO but picked up a lot more in the market today. I think this is a compelling long term hold, even though there's probably good returns to be made in the very short term too.

This business has all the traits of a business you want to hold for a while:

1. Large and growing TAM
2. Capital light model
3. Technology driven & scalable platform
4. High GP margins & high operating leverage
5. Quality client base that is growing

Even if you plug in some basic assumptions it's not hard to see a very high valuation and a business that will spit out LOTS OF CASH.

The key is the 80% gross margin. Plus now that they have more funds, they can scale quickly and also benefit from the re-opening of travel post corona virus. This will have a very large tailwind as people will be desperate for a holiday and travel. That also includes business customers that need to do face to face meetings instead of Zoom/Teams.

I think my revenue numbers are CONSERVATIVE so it's really anyone's guess how quickly it will grow, but given the size of the market, if we think longer term, it's not a stretch to see this business generating revenue of $100m per annum. Apply a 80% GP margin to that and some simple overheads and you have A VERY LARGE PROFIT. Some numbers below for the first few years. Given the low overheads things only improve in later years, which I'm sure is pretty evident.

Due to the industry, high growth rate and capital light business model,I think the valuation multiples will be at a premium. After all, if you know this will be spitting out cash and has a strong competitive advantage then you'll bid this up.

If I use FY26, when the business should really be kicking some goals, here's a valuation matrix to give you an idea of how many bags this could be. Why am I picking FY26 when that is a few years away? Well, I'm doing that to enable more valuation tools to be used to help illustrate why this is A STRONG BUY (IMO). This will be on scary multiples in the near term as it will be loss making and revenue will be relatively low but it doesn't take many sales to turn this into a cash machine...

Anyway, those are some of my thoughts. Interested in other views especially if someone has some numbers to share,