5 ms·

Wow, that's priced at ~2.8x 2015 revenue. So low.

by gatsby 11y ago

mey 11y ago
Not going to go dig for the SEC filing, but transaction revenue is not something look at, as that is basically booking money they are moving on behalf of someone else. I would suggest looking at EBITA, fraud loss, avg transaction fee schedule and transaction number volume.
- CyrusL 11y ago
  Square uses "Gross Payment Volume" to describe that, not revenue. GPV is ~$30 billion. You can search for GPV in the S-1 to see the specifics: https://www.sec.gov/Archives/edgar/data/1512673/000119312515343733/d937622ds1.htm https://www.sec.gov/Archives/edgar/data/1512673/000119312515...
  - jamiequint 11y ago
    Braintree was doing $12B in GPV when they sold for $0.8B and are now doing ~$50B in GPV. Square is actually doing around $35-45B now (8.8B in most recently reported quarter). Growth is relatively slow though so will be interesting to see what happens in the IPO.
pyrrhotech 11y ago
the average P/S ratio of the S&P 500 is at a historic high around 1.8 (http://www.multpl.com/s-p-500-price-to-sales http://www.multpl.com/s-p-500-price-to-sales) with long term average at 1.4, so this is still double the long term average. Square's gross margins are very thin in comparison to many other "household name" tech companies, so it deserves a much lower P/S. I've also heard growth is really slowing. This multiple doesn't surprise me at all, and I still won't be buying any of the stock.
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danielpal 11y ago
If you look at gross profit (164.4 million for the first semester 2015) it's a much more comparable metric to what SaaS revenue would be. The problem with overall revenue in this market it that it's a low margin and more that half of it goes to the credit card companies. With ~328 profit per year, they are getting about 8X multiple - very comparable to Hubspot, Zendesk which are doing terrific in the public markets. For anyone getting stock options, expect as much as 6X-8X multiple on revenue if your gross margin is >60% and your year-to-year growth is >70% - the 10X-14X days are gone. Else, if year to year growth is below 70%, or gross margin less that 55%, expect 2X-4X.
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Wow, that's priced at ~2.8x 2015 revenue. So low.

by gatsby 11y ago

Wow, that's priced at ~2.8x 2015 revenue. So low.

mey 11y ago

Not going to go dig for the SEC filing, but transaction revenue is not something look at, as that is basically booking money they are moving on behalf of someone else. I would suggest looking at EBITA, fraud loss, avg transaction fee schedule and transaction number volume.

CyrusL 11y ago
Square uses "Gross Payment Volume" to describe that, not revenue. GPV is ~$30 billion. You can search for GPV in the S-1 to see the specifics: https://www.sec.gov/Archives/edgar/data/1512673/000119312515343733/d937622ds1.htm https://www.sec.gov/Archives/edgar/data/1512673/000119312515...
- jamiequint 11y ago
  Braintree was doing $12B in GPV when they sold for $0.8B and are now doing ~$50B in GPV. Square is actually doing around $35-45B now (8.8B in most recently reported quarter). Growth is relatively slow though so will be interesting to see what happens in the IPO.

pyrrhotech 11y ago

the average P/S ratio of the S&P 500 is at a historic high around 1.8 (http://www.multpl.com/s-p-500-price-to-sales http://www.multpl.com/s-p-500-price-to-sales) with long term average at 1.4, so this is still double the long term average. Square's gross margins are very thin in comparison to many other "household name" tech companies, so it deserves a much lower P/S. I've also heard growth is really slowing. This multiple doesn't surprise me at all, and I still won't be buying any of the stock.

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danielpal 11y ago

If you look at gross profit (164.4 million for the first semester 2015) it's a much more comparable metric to what SaaS revenue would be. The problem with overall revenue in this market it that it's a low margin and more that half of it goes to the credit card companies. With ~328 profit per year, they are getting about 8X multiple - very comparable to Hubspot, Zendesk which are doing terrific in the public markets. For anyone getting stock options, expect as much as 6X-8X multiple on revenue if your gross margin is >60% and your year-to-year growth is >70% - the 10X-14X days are gone. Else, if year to year growth is below 70%, or gross margin less that 55%, expect 2X-4X.

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