New poster, trying to stick to the rules.
Hi all, I have been investing (collecting stocks) for the last four and a half years and having subscribed to the fool for the last ten months, am still learning how to invest with a little more rigour as opposed to simply purchasing stocks based on trends or hunches.
Regardless of said hunches, I have always invested with the intention of buying and holding for the long term. Although, as I have learned more on the journey, I have sold the odd stock based on perceived valuations. Selling TSLA in Feb because I felt it was overvalued has turned out to be one of my more regrettable decisions. But that has probably reinforced the point WB made about losing more money by selling than nor buying…
Anyway, I feel I have a growth stock that I would like peoples opinion of. It was one of the first stocks that I bought back in 2016. It is a Robotic Process Automation (RPA) stock and at the time I felt that businesses would certainly be keen to replace human labour with computer robots for menial back office tasks. More to it, but the business is a play on the ‘robotic work force’; that is why I purchased it. I know, I know, I am learning.
Blue Prism (PRSM) Trades on the Alternative Investment Market (AIM) through the London Stock Exchange.
All in millions GBP.
Annual Revenue:
2015 6.06
2016 9.6
2017 24.6
2018 55.2
2019 101
1H20 68.5
Gross margins at circa 99% 2015 – 2018 and dipped to 91% in 2019
Operating expenses growing at 100%+ every year, currently at 173.5m (worrying?)
61% of operating cost is S&M 64% is payroll related.
Free cashflow:
2015 0.4
2016 -0.03
2017 4.03
2018 -6.5
2019 -102.1 (Spent on contract assets, short term investments and acquisition of subsidiary Thoughtonomy)
They state that the cash outflow represents the peak of investment and that it will be the driver of future revenue growth.
Net Assets of 95.5m
Recurring revenue currently at 96% with a net retention rate of 143%
Enterprise customers
2016 153
2017 477
2018 971
2019 1677
Business is a SaaS land and expand model.
Upsell Deals (72% of 2019 MRR additions)
2016 81
2017 264
2018 723
2019 1139
Early stage of market growth and contracts globally
Investor presentation:
https://investors.blueprism.com/sites/blueprism-ir/files/fy1…
Financials:
https://investors.blueprism.com/sites/blueprism-ir/files/326…
Having now researched PRSM from a slightly more educated perspective I feel that they could be poised for massive growth in the very early stages of newish market. SaaS based which is of course exciting and with extremely high gross margins I am happy to swallow the current cash burn for investment and customer acquisition.
I am sure there are few things I will have missed, but keen to get thoughts from some more experienced investors.