Making a Bet on the Value of Consumer Data Aggregation…Personally, I love this broader space of aggregating and monetizing Consumer preference data using artificial intelligence as this is where the decision analysis for big consumer brands is going.
You have two ways to play it, advertising through an AcuityAds (AT.TO) or a play like Datable (DAC.V) where you are selling direct to consumer brands and eventually will own the propriety consumer data sets that will be highly valuable on top of a highly scalable platform.
If you look at large cap companies that are playing in this space they trade at astronomical Price to Sales running north of 5.0 – 10.0x Sales or on the private side they are getting money poured into them hand over fist which are far from profitability. In the middle, there is AT.TO & DAC.V executing and both trading at a fraction of the multiple. – My kind of investment.
Here’s How I See It;
You have a core Recurring SaaS platform with a $2.0M in contracted revenue growing both contract size and aggregate value with a margin profile running north of 70%. With a free upside optionality of the Flexxi Rewards platform which aggregates 1st party consumer which could be more valuable then the core Platform3 business line because it is so much more scalable.
Clean Balance sheet, and close to EBITDA and Cashflow positivity that would likely have already been hit if they were not investing aggressively into their Flexxi Rewards platform.
Just look at the amount of money that has been invested to build Platform3 & Flexxi Rewards, $12.0M dollars has been thrown at this business model to grow and refine this technology. Their client base with many of the largest CPG companies has validated the technology and proved the viability of the business model.
With a market cap of $3.0M dollars there is no way you could build replicate the platforms they built for that cost. It is grossly underpriced.
On Valuation
The market has totally ignored the acceleration in the core Platform3 business in the past couple months.
Consider the following, On May 30 they had a contracted revenue backlog $1.3M for their Platform3 business, in a short 45 days later or so on July 17 they announced they were closing in on $2.0M in contracted revenue for Platform3. – THIS IS AN INCREASE OF OVER 50% IN CONTRACTED BACKLOG IN LESS THAN TWO MONTHS
This is before we even consider the partnerships they are lining up to launch their Flexxi Rewards Program in the coming months.
If I use a 3.0 – 4.0x Sales figure comparable to other Recurring SaaS based business models with high gross margin profiles similar to DAC.V on that $2.0M contracted Revenue figure I get to a share price target of 0.14 – 0.19/share or 0.165/share at the midpoint which equates to 200% upside and still get all the free upside optionality of the Flexxi Reward platform for free.
Personally, I think the company is worth at least the value of the capital it took to build the platform because it has a proven business model, this would equate to at least 0.25/share.
You can see how the numbers can go parabolic to the upside quickly just from a sentiment change. The name is an absolute lottery ticket. Under 0.08/share close your eyes and buy it, because if the market doesn’t start to recognize the value of it could easily get scooped up by a bigger fish at a nice premium. – Same goes for AT.TO
LONG