Good post:) I reckon you meant to say, "(b).(If) 1PG management...

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8horse

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16/06/16

20:56

Post #: 18051754
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Originally posted by TheLittlePrince ↑

I am just going to provide some observable facts within the current SaaS market.

Here is EV/Foward Revenue multiples on publicly traded SaaS companies (separated into quarterly 'buckets' depending on how fast they are growing)

As you can see, we have seen a contraction in majority of 'fast growth' SaaS companies over the past few months. Majority of companies demand a EV/Forward Revenue multiple of between 3.2 - 4.7 depending on how fast they are growing.

1PG currently has an EV on latest quarterly of $21.3M. Using simple arithmetic we can see that this means in order for value to be present based on the current SaaS market valuations 1PG must be looking at between $4.53M - $6.66M forward revenue.

You can see why the market is punishing its valuations based on analysis like this.

I am all for optimism and I really enjoy it when I see shareholders get excited at company success, but there is no point dismissing observable facts.

Unless:
(a). SaaS valuations broadly turn around (indicating we enter a SaaS buyers market); or
(b). 1PG management are able to steer the company into the $4.53M - $6.66M forward revenue range; then I expect more shareholder pain.

Entering a speculative investment because it trades near cash is a fallacy if management have been eroding shareholder value through frivolous cash management.

Good luck guys

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Good post

I reckon you meant to say, "(b).(If) 1PG management are (un)able to steer the company into the $4.53M - $6.66M forward revenue range; then I expect more shareholder pain."

Annual bookings as at 30 April 2016, were around $4.9m, (Q415 Bookings $4.2m + Q116 New Bookings of $760k)

LinkedIn, Recruitment revenue for 2015 was US$1.7b, Microsoft bids for US$26.6b, they definitely are paying multiple of your conclusion of 3.2 - 4.7 times. (LinkedIn 15 times).

1PG Price at posting: 38.5¢ Sentiment: Buy Disclosure: Held
7 Upvote

0 Great analysis

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Good post:) I reckon you meant to say, "(b).(If) 1PG management...

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