Vacasa, VCSA

I’ve mostly been a lurker but I have a stock I wanted to get on the boards radar. It’s not SaaS but I get tired of talking about UPST, DDOG and the same other stocks we mostly all own already, This stock is not SaaS but does meet other criteria such as recurring revenue, fast YoY growth, in the early innings in a special niche and a fast growing market.

The company, Vacasa, VCSA, is a vacation property management company. It came out of a SPAC in December and slipped immediately from $10 to $5.40 but has sincencrawled back to $8.92. Their guided NTM revenue out of the SPAC was $770 Million but their actual revenue was $900 Million, an increase of 76% YoY. Their projected guidance is for $1.125-1.175 Billion but perhaps they’re sandbagging*I hope).

They are the big gorilla in the fast growing short term vacation property management business. There are 20,000 vacation property management companies in the country and they are No 1. Even at No. 1 they only have less than a 1% share of the total marketplace of short term vacation rental property management companies. Much of my information is from the Motley Fool website discussion with Matt Frankel and Jason Hall on March 18th although I have personal firsthand experience using Vacasa’s services.

You might think of them as AIRBNB or VRBO but they are not. If you own a second vacation property than you want to rent out, you can list it with AIRBNB and pay them their 15%. But that leaves a lot of work left to do. Believe me, I know. You have to deal with AIRBNB’s calendar of openings, how to price your property on a daily basis, how you are displayed on their website, you have to clean your place after every stay, provide linen service, fix toilets, replace damaged items and a whole host of things that many rental homeowners don’t want to spend their time doing. You might also be living hundreds of miles away so you need a local property manager to handle some of these items.

These are the services VACASA provides. They offer a unique turnkey service. They charge more money, maybe 35% of the rental income but they place your ads on AIRBNB, VRBO and other sites as well, they make sure your place is clean, have a dynamic proprietary daily pricing algorithm and deal with all the other items I mentioned. They are a local hands on support system. You are hands off. Admittedly, some of these services are not readily scalable but the service is very sticky and the TAM is enormous. As Matt Frankel said, it’s a consolidation business. They’re gobbling up local property management companies offering more comprehensive and nationwide service.

There are n increasing number of professional investors that own many vacation rental units and prefer one firm to manage all their properties where ever they are. VACASA fits the bill

I’m long VCSA