Realised today I dont have a thread for PPH, Pushpay holdings, my little happy clapper, ticket clipping, stonk.
Pushpay Holdings Limited, together with its subsidiaries, provides donor management system to the faith sector, non-profit organizations, and education providers in the United States, Canada, Australia, and New Zealand. Its donor management system comprise donor tools, finance tools, and a custom community app. The company provides engagement, payments, and administration solutions, which enables its customers to enhance participation and build stronger relationships with their communities. It also offers Software as a Service church management system, a platform that provides churches to connect and communicate with their community members; record member service history; and track online giving and perform a range of administrative functions. Pushpay Holdings Limited was founded in 2011 and is based in Auckland, New Zealand.
I first bought PPH in 2018 and it was a pretty speculative position and it wasn't really cheap at 77c, but I could see that the business would scale well and the management team seemed to have a very strong understanding of the business niche and a massive opportunity was obvious in moving to a digital/online provision of the core services.
It has performed well over the following few years, but this past FY it has really shown the earnings power of the business as it scaled up. Its now delivering very good metrics across the board, the ROIIC is now well over my hurdle rate running at about 23% over the last 3 years, FCF Yield is approaching 6%, its starting to spew a lot of cash, they paid off all debt this year from cash generated, and the debt was only used for about 18 months for an important acquisition.
My range of IV is around $1, its trading at $1.50 and I suspect its one of those businesses that will always look a bit expensive on current valuation, but keeps growing into it and if you wait to get in when its cheap you will be on the sidelines for a long time!
The one red flag is that they emphasis "Bullshit Earnings" in their reporting, they love using EBIDTAF & EBITDAFI, which i call "Extra Bullshit Earnings", its typically something you see with promotional management of Shitcos, PPH has no need to do it, they have really good metrics to report and focus on. I sent an email to their head of investor relations communicating my thoughts, no doubt they will ignore me and keep reporting EBEs.
