Are you looking for a marketplace business with best-in-class technology whose value proposition makes every stakeholder better off? Well, I think I have just found it.
Love this. Took me a hot min to read it and make sure I understood everything but excellent primer for someone that was unfamiliar with the business (me). I chose to avoid this one last year as I thought it was looking to hot but after the drop it's had it catches my eye now.
My issue is not with how it's growing top line but the valuation that's attached to it. While you bridge to 2027 at an assumed 20x multiple, you're paying 123x right now.
Given what's going on on a macro level, I almost feel while the LT potential is there, the ability to get a better price in the NT seems high as the market is pricing in 9 hikes now with FED funds rate getting pretty close to 3% now and inflation *possibly peaking*.
Wouldn't disagree on valuation looking expensive. I personally don't look at macro or try to time it (might as well trade interest rate derivatives if I was any good).
The quick and dirty way too look at it is that they have contribution margins of 50-60% for older customers. At no growth, this should more or less be the contribution margin for the biz.
From there on, how much will they have to spend on technology, G&A etc.? 30% of revenue? That gets you to 20-30% EBITDA margins, which should translate to FCF well considering they have almost no physical assets. Can do some correction on that if you'd like.
Key questions for valuation if your confident in biz quality:
1 - GMV growth?
2 - Contribution margin?
3 - corporate costs
To me any realistic range in these gets you a price much higher in 5 years time.
Must be a no brainer buy today?
Agree. Hope you bought some ;)
What did you think of their Capital Markets Day presentation?
Also they say their SBC to employees causes 3% dilution p.a.
Love this. Took me a hot min to read it and make sure I understood everything but excellent primer for someone that was unfamiliar with the business (me). I chose to avoid this one last year as I thought it was looking to hot but after the drop it's had it catches my eye now.
My issue is not with how it's growing top line but the valuation that's attached to it. While you bridge to 2027 at an assumed 20x multiple, you're paying 123x right now.
Given what's going on on a macro level, I almost feel while the LT potential is there, the ability to get a better price in the NT seems high as the market is pricing in 9 hikes now with FED funds rate getting pretty close to 3% now and inflation *possibly peaking*.
Would love to hear your thoughts on that
Wouldn't disagree on valuation looking expensive. I personally don't look at macro or try to time it (might as well trade interest rate derivatives if I was any good).
The quick and dirty way too look at it is that they have contribution margins of 50-60% for older customers. At no growth, this should more or less be the contribution margin for the biz.
From there on, how much will they have to spend on technology, G&A etc.? 30% of revenue? That gets you to 20-30% EBITDA margins, which should translate to FCF well considering they have almost no physical assets. Can do some correction on that if you'd like.
Key questions for valuation if your confident in biz quality:
1 - GMV growth?
2 - Contribution margin?
3 - corporate costs
To me any realistic range in these gets you a price much higher in 5 years time.