MoneyTalks: Pointerra and Rent.com.au are ASX multibaggers since Bevan Slattery bought in; is more growth to come?
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MoneyTalks is Stockhead’s regular recap of the ASX stocks and sectors that fund managers and analysts are looking at right now.
Today we hear from Finola Burke, director at RaaS Advisory.
Both had the same major catalyst for their share price taking off – tech entrepreneur Bevan Slattery buying in.
Slattery bought 50 million shares of Pointerra for $2.5 million last July and 40 million shares of Rent for $2 million in February. Both purchases were made at 5 cents per share and now worth $32.5 million and $10 million respectively.
RaaS’ Finola Burke notes the company has built a strong a profile with the rental market – consisting of 32 per cent of households in Australia.
It offers a product called RentBond which helps tenants pay their bond.
Burke reckons the opportunity for further growth is their transition to transaction-based services that expand the company’s reach to throughout the entire rental period.
She noted they were relaunching a rent management product known as RentPay.
“That gives them the opportunity to extend the relationship to the whole rental period and rather than just the 4-6 weeks they’re currently working with – more likely to be aligning with a 12 month period – and gives them the opportunity to offer other services,” she told Stockhead.
“We’ve got a valuation of 35 cents per share and that is predicated on the company getting 5 per cent share of the total rental market by 2023 for their RentPay product.
“And that’s a fairly modest forecast so there’s potential upside on that 35 cents.
“They’re a purpose led company – focused on their audience – trying to provide empowerment to renters.
“And the analysis we did in our initiation report shows purpose led companies tend to perform better both operationally and from a share price perspective.”
Pointerra has often been labelled a geospatial analytics company. More broadly they have a technology allows compression of very large data sets and easier analysis of them.
While they have been focused on geospatial analytics, Burke thinks their opportunity is to extend this across more industries noting they’ve had some good traction with the poles and wires companies in the US.
“If you think about geospatial data, what Pointerra’s technology does is help people see what has changed,” she said.
“That’s very powerful because it means you can manage things like if any damage may have occurred in natural events such as storms, they [poles and wires companies] can see which part of the power grid has gone down and they can see which poles need immediate attention.
“It is a powerful technology they have developed.”
Pointerra’s Annual Contract Value (ACV) has been on the way up, fast reaching US$2.87 million in July last year, then US$6.88 million in January.
RaaS’s base case valuation is 75 cents per share predicated on them reaching US$50 million by 2025. But Burke notes the potential uses for Pointerra’s tech is endless including defence, government agencies and surveyors.
“It captures many, many industries. Essentially they’ve taken what was a highly manual, slow, and cost-prohibitive process into a very, fast workflow solution for 3D data,” she said.
“And you can imagine technology has advanced so much that it is impossible to analyse data without something like Pointerra’s platform.”
Burke is also excited about a new data marketplace the company is working on – 3Dinsight.ai – although this is still at early stage and hasn’t been factored into RaaS’ forecasts,
“That will bring in more customers so people can utilise data that’s on the platform,” she said.
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