Growth Portfolio Update
Published 10-SEP-2015 00:00 A.M.
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1 minute read
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Overview: Freelancer Ltd ("Freelancer", "the Company") is an Australian-based software company operating the world’s largest freelancing, outsourcing, and crowdsourcing marketplace. As of 30 June 2015 Freelancer 15.9m total registered users and 8m total projects and contests. Freelancer acquired payment service provider Escrow in April 2015. Our last advice was a ‘buy’ recommendation on 3 June 2015 at $1.14.
Catalysts: Freelancer is on track to achieve another year of double-digit revenue growth. We expect growth momentum to continue throughout 2015, buoyed by favourable currency exchange movements. As most of its revenue is derived offshore further depreciation of the AUD will enhance its revenue profile. Management recently sold $35m worth of shares to increase the free float to 23%. Large institutions are starting to accumulate and more liquidity should attract investor interest in the long- term.
Hurdles: Despite incremental revenue growth, Freelancer has not made a profit yet and remains reliant on external funding. Growth through acquisitions results in integration risks for management. The current valuation incorporates future earnings growth, which could result in share price depreciation if targets are not met.
Investment View: We continue to be attracted to Freelancer’s growth trajectory and favourable outlook. We expect growth momentum to continue bolstered by a low AUD. While Freelancer is starting to attract large institutions, we reiterate our ‘buy’ advice and raise our 12-month price target to $1.70.
General Information Only
This material has been prepared by Jason Price. Jason Price is an authorised representative (AR 000296877) of 62 Consulting Pty Limited (ABN 88 664 809 303) (AFSL 548573) (62C), and a Director of S3 Consortium Pty Ltd (trading as StocksDigital).
This material is general advice only and is not an offer for the purchase or sale of any financial product or service. The material is not intended to provide you with personal financial or tax advice and does not take into account your personal objectives, financial situation or needs. Although we believe that the material is correct, no warranty of accuracy, reliability or completeness is given, except for liability under statute which cannot be excluded. Please note that past performance may not be indicative of future performance and that no guarantee of performance, the return of capital or a particular rate of return is given by 62C, Jason Price, StocksDigital, any of their related body corporates or any other person. To the maximum extent possible, 62C, Jason Price, StocksDigital, their related body corporates or any other person do not accept any liability for any statement in this material.
Conflicts of Interest Notice
S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.
Publication Notice and Disclaimer
The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.
Any forward-looking statements contained in this article are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results or performance of companies featured to differ materially from those expressed in the statements contained in this article. S3 cannot and does not give any assurance that the results or performance expressed or implied by any forward-looking statements contained in this article will actually occur and readers are cautioned not to put undue reliance on forward-looking statements.
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