Two fund managers have both declared Airtasker Ltd (ASX: ART) is a great business, but one explained why she bought into it and the other put up a case for not investing.
Airtasker is an online marketplace that matches customers that need chores done to "taskers" who bid to execute it for a fee.
The company listed on the ASX in March after an initial public offering price of 65 cents per share. The stock was going for $1.20 on Wednesday afternoon.
The Firetrail Small Companies Fund bought into the Australian business during a pre-IPO round.
Firetrail equity analyst Eleanor Swanson said that Airtasker's competitive advantage was that it wasn't prescriptive about what service was offered to end users.
"Users create their own unique tasks and communicate the requirements directly to taskers," she posted on Livewire.
"The flexibility is valued by both customers and taskers, reflected by the fact that a new task is posted on Airtasker every 17 seconds. In addition, the company is now the number 1 employer of platform workers in Australia, ahead of even Uber!"
Airtasker's 3 paths for growth
Swanson laid out three different opportunities that Airtasker could leverage for future growth:
- Marketing to accelerate new customer sign-ups and spending frequency
- New products such as Tasker Superstore
- Overseas expansion
Airtasker has seen consistent growth in new customer numbers, according to Swanson. This was especially impressive last year when marketing spend was cut by 90% after the COVID-19 pandemic arrived.
"We estimate 8% of Australian households have used Airtasker with current levels of brand recognition sitting at about 50%," she said.
"The company aims to reach over 80% brand awareness within the next 2 years. Heightened brand awareness will drive increased market penetration and growth in total transaction value on the marketplace."
Swanson called for the platform to invest in "call-to-action marketing" to get more out of existing customers.
"Currently, customers transact on Airtasker 2 times per annum, on average. An increase to 3 times per annum would immediately deliver 50% revenue growth [even with] customer numbers flat."
Airtasker also has an opportunity to replicate the Australian model into the UK, New Zealand, Singapore and US markets.
"New markets increase Airtasker's total addressable market 12 times to $643 billion."
Why Airtasker wasn't a buy for this fundie
Frazis Capital portfolio manager Michael Frazis also thought Airtasker was "a great company".
"I think it will generate positive returns over time, probably better than most stocks," he told clients in a video update.
But he had a simple reason why he didn't invest in it.
"We passed on it because growth isn't high enough," he said.
"That's not to say it's not going to accelerate and it's not going to do really well… But when we looked at it, the growth rate wasn't high enough for us."
Frazis explained that the average revenue growth rate within his fund was now about 110% per annum.
"We're really looking at companies in that category," he said.
"They're rare, they're hard to find, but they can really move when they get going."
