Freelancer Ltd (ASX: FLN) shares hit the ASX boards in November 2013 after an initial public offering at 50 cents per share which was equal to 463 times 2013's forecast earnings. What followed was a lot of hype around the next great innovative technology stock that lifted shares to more than $1.80 in the month after the November listing.
Today Freelancer shares sit at 74.5 cents after it announced a first-half loss of $600,000 as it continues to invest in revenue and user growth for its online employment website. Freelancer still has an eye for publicity though proclaiming that it is positioning itself as the next Amazon.com, Inc. (NASDAQ: AMZN) of its industry in reporting the results.
Net revenues for the half year of $11.9 million were not quite at Amazon's levels around US$39 billion, but were up 41% on the prior corresponding period. Freelancer also added 1.8 million users organically for the period, up 54% on the prior corresponding period, which like the revenue growth is steady but not spectacular.
The net loss came about as the business has been adding costs through new staff hires around the world and product improvements such as a better mobile website. Notably, related administrative expenses also more than doubled on the prior corresponding period to $3.7 million.
Freelancer would appear to be in a growth marketplace of allowing more service sector jobs to be carried out remotely, but whether that shift will be quite as revolutionary and quick as the company hopes is yet to be proven.
With a market cap around $323 million Freelancer's valuation might look a bit rich for a company that announced a net profit of $1.1 million for the full year ended December 2013. If you're a believer in the Freelancer story then you may be a buyer at today's prices, however in my opinion the stock looks a hold at best until it can show big revenue growth.
Shares were flat at 74.5 cents after today's announcement.
