RE:RE:RE:Q3: Poor Quarter Across the Board. Even if they only got $10 million of the $40 million pipeline it would be enormous for their profitability. Their Buy Gift Transfer core business is a very low margin business but Points Travel is pretty much all profit. So if they could get just $10 million from Points Travel then net income would go from $4 million currently to $14 million. That has a tremendous effect on EBIDTA and eps goes from around 25 cents projected in 2016 to over 90 cents. And the PCOM stock would go from the $6.92 it is today for to over $20. And that is not counting any contribution from the Loyalty Wallet or additional partners to the BGT business (They will be announcing 3 new airlines very shortly).
You say there are a lot of competitors. Are you talking about Priceline and Expedia?
While they are obviously the big OTAs they don't offer you miles when booking a hotel.
Remember, with Points Travel its partners are providing all the marketing expense so PCOM can undercut the online travel agencies and turn over the lion's share of the gross margin on a hotel rental to the consumer in the form of huge free miles bonuses.
If you were looking to book a hotel and the price was the same between Points Travel and Priceline, but you would receive 1,000 free miles if you booked thru Points travel, what would you do?
They have 5 partners signed on and 2 new partners coming on board in the next month or so.
They have an advantage in that they deal with all these huge loyalty programs already...so they know the players and what it takes to get these deals done.
Obviously today was painful for PCOM longs. But this story oes a lot deeper than the third quarter earnings. Points Travel and the Loyalty Wallet will be a huge. Just a matter of how long it takes to have meaningful impact on the bottom line.