Shares of mobile commerce business PUSHPAY FPO NZX (ASX: PPH) rallied as much as 11.2% this morning to a high of $1.89 following a brief business update.
Although the shares have since retreated to $1.80 – up 5.9% for the session – they have risen almost 40% since hitting a low of $1.29 just prior to Christmas. That said, it is still trading below its float price of just over $2 from October 2016.
Pushpay is a fintech business that offers a payment application to churches, with a particular focus on the United States market. This is a big market: in its prospectus, released to the New Zealand Exchange in 2016, it noted that US$115 billion had been given to religious organisations across the US in 2014. Of course, not all of that is up for grabs by companies like PushPay (much is still given in cash), but it is an opportunity, nonetheless.
It was an update to the market this morning that acted as the likely catalyst for the run in its share price today. It said that it had exceeded the increase in Annualised Committed Monthly Revenue (ACMR) from the previous quarter by 10.6% to US$7.3 million, up from US$6.6 million for the quarter ended 30 September 2016.
Notably, that excludes ACMR derived from a recent acquisition of Bluebridge's church app) which, based on this chart, suggests Pushpay's ACMR is now US$41.2 million or above (up from US$33.9 million).
Although no other details were given regarding the company's performance, it said it would provide further details to the market on Wednesday (at its full quarterly operational update).
Investors will be eager to learn other facts such as how many merchants the company currently has (it had 5,286 as at 30 September, 2016) as well as the average revenue per merchant, or ARPM (ARPM was US$534 per month as at 30 September, 2016). At the time, the company had recorded substantial growth in both measures compared to the prior year, so investors will be looking to see that trend has continued.
Although Pushpay is recording strong growth, it isn't without risk. Like XERO FPO NZX (ASX: XRO), Pushpay isn't profitable. It recorded a net loss of US$11.3 million for the six months ended September 2016, which can, at times, impact the market's view on the business and its shares (at least in the short-term). It's also burning through cash while its Australian-listed shares are also somewhat illiquid, making it difficult (particularly for larger shareholders) to buy or sell without moving the needle too much.
Still, Pushpay is certainly a company worth watching, and it'll be interesting to see what figures it produces when it reports on Wednesday.
