The iSignthis Ltd (ASX: ISX) share price was trading sharply higher today as the broader market, or S&P/ASX 200 (INDEXASX: XJO), barely budged in comparison.
iSignthis Ltd (ISX) Share Price
As you can see above, the iSignthis share price has risen from around 14 cents to nearly $1.50 in just six months. Based on the total shares outstanding (~1.084 billion) iSignthis has a market capitalisation (total price of all shares x share price) of around $1.62 billion.
What Does iSignthis Do?
Shares of iSignthis are listed on both the ASX and Frankfurt Stock Exchanges. It provides remote identity verification and payment authentication combined with e-money, transactional banking, IBAN issue and payment processing capability. Its products and businesses are iSignthis Paydentity, ISXPay, UAB Baltic Banking Service and Probanx Information Systems.
Even though that all sounds very impressive to a growth investor like me, during the most recent half-year financial reporting period, iSignthis reported revenue of just $7.5 million.
Long or short term investors should compare that to the market capitalisation of $1.62 billion.
Last half financial year iSignthis reported a loss of ~$730,000.
Now, I’m not saying iSignthis shares are crazily overvalued but I also can’t tell you the last time I’ve saw something rise so fast and so high as this. It may have been a few years ago with the tech company called Getswift Ltd (ASX: GSW). In the space of a few months around late 2017 and early 2018 Getswift went from over $3 per share to around $0.60. It’s now changing hands at around 40 cents.
iSignthis could well go on to be a great business and earn lots of revenue from the new customers using its network. As Rask Media’s Jaz Harrison aptly said today following the company’s operational update, iSignthis could be one to watch.
However, in my mind, buying shares in iSignthis now would be extremely speculative and high-risk. To be clear: I’m not buying shares today.
I’d rather buy shares of fast-growing companies with established franchises and strong competitive advantages, coupled with good management and a much more reasonable valuation.
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Disclosure: At the time of publishing, Owen does not have a financial interest in any of the companies mentioned.