Search ASX code:
Generic filters

Is Pushpay still dirt cheap?

Shares of Pushpay Holdings Ltd (ASX: PPH), a company I first unearthed for Rask Invest members back in December 2018 (at a price of $3.10), ended today’s ASX trading session 19% higher.

One day. 19% higher.

The catalyst, as is almost always the case with our companies, was a huge positive ‘surprise’ in revenue, free cash flow and market potential.

In an update to Rask Invest members today I wrote:

“Like splashing a bowl of cold water on your sibling’s face while they sleep, Australian investors have finally woken up to Pushpay’s long-run potential.”

“…at risk of sounding egotistical, this latest positive round of financial results from Pushpay was largely expected by us. We have written at length about Pushpay’s potential and scale. I even made it the case study of our Value Investor Program so our students and members who took the program could see exactly what we’ve been seeing for years.”

(Please note: I’ve left out the final part of the paragraph. It’s reserved for Rask Invest members only.)

When I put a buy rating on the church software business for Rask Invest, I released a valuation on its shares suggesting that I thought it was worth around $3.60. It wasn’t much upside for a growth investor like me.

In fact, the raw upside to my intrinsic valuation was definitely not as much as I usually jump to for companies inside our investment research service.  That said, two years ago Pushpay was in its infancy and still had a lot of work to do to prove itself.

Fast-forward to now, though, and it seems our patience is beginning to be extremely well rewarded.

I never judge a company’s performance by its share price. I’ll leave that to the novices. The real reasons Pushpay shares have rallied so fast and so high in just two years can be put down to the company’s scalability, stickiness, best-in-class products and management’s execution.

Since its 2016 financial year, Pushpay’s revenue has exploded higher. From around $10 million to $127 million — a 12-fold increase.

Today, we uploaded our brand-new updated report on Pushpay shares, including my latest valuations and forecasts.

Is Pushpay still a buy?

With the company’s share price up nearly 20% in a day — and 34% in one month — I think it’s right to question whether or not Pushpay is still undervalued. For example, what happens if you buy shares at over $5 but the shares are only worth $4?

Rask Invest members who pay us the low fee of $399 can access all of our stock updates, my latest Pushpay investment rating, my valuation material, plus a mountain of other members-only content (share ideas, ETF research, Q&A, videos, podcasts, downloads, you name it.).

My full investment report is reserved for our members (or you, if you join today).

However, what I can reveal to you here and now is this:

  • Many investors would say Pushpay remains a higher-risk stock.
  • At the same time, the business is arguably one of the highest-quality technology companies on the ASX. It’s in my top 10 picks.
  • Our analyst research estimates there are over 200,000 potential customers for Pushpay’s software.

Given that most Rask readers know we always disclose our stock holdings at the bottom of our emails: you should know, I still own my Pushpay shares.

Alongside many other great technology companies and some ETFs which are currently inside Rask Invest, I haven’t sold a single share of Pushpay since I started the service.

How I’d include Pushpay shares in a diversified portfolio

As you know, I like to build the ‘core’ of my portfolio using ETFs. Then I throw in my highest conviction share ideas. Mostly they are rapidly-growing technology, industrial and healthcare companies which I hope are capable of growing 5x or more over a decade.

Of course, we’ll get plenty of our ‘best ideas’ wrong — even if Rask Invest’s performance says otherwise — but that’s perfectly ok with me.

Studies have shown that around 4% of stocks produce all of the excess returns on the stock market. Sometimes, when you’re looking for rockets, things won’t go according to plan.

Occasionally, a company you thought was in the 4% was in the 96%. I believe the more research you do, the better your chances of finding the 4%.

And if you want to achieve ultimate success as a long-term investor, I think there’s no point wasting time on mediocre companies. Just build a low-cost core portfolio then add 10-20 of the very best shares you can find (note: this can take a few years), then hold on.

Surprisingly, when you’re early in a company like Pushpay, holding onto the shares can be the hardest part. But if it were easy, every investor would do it.

If your investment philosophy is similar to mine — meaning you are willing to buy and hold only the very best shares you can find — you know where to go.

It’s only $399 to join Rask Invest for the first six months, then $199 for every six month period that you choose you stay with us. And you can cancel anytime.

But with 10 stocks on our Rask Invest scorecard right now, more on the way plus heaps of extra stock market coverage and research, I’m confident just one our ideas justify the membership fee.

Simply click here and log in to your Free Rask account (if you have one) or just upgrade on the subscriptions page to become a premium Rask Invest member.

For three more shares I’d consider buying today, grab a copy of our free investment report – available below.

Disclosure: Owen owns shares of Pushpay.

Free: Our Ultimate BNPL Sector Report

Afterpay, Zip Co, Sezzle… is BNPL the opportunity of a lifetime? Or is the sector a ticking time bomb? Our analyst’s 7,500-word report, Our Ultimate BNPL Sector Report, takes a deep dive into the BNPL sector and shines a spotlight on each of the major players in this booming market. You can get the full report right now (for FREE) by entering your email below, we’ll email it to you.

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Free: Our Ultimate BNPL Sector Report

Afterpay, Zip Co, Sezzle… is BNPL the opportunity of a lifetime? Or is the sector a ticking time bomb? Our analyst’s 7,500-word report, Our Ultimate BNPL Sector Report, takes a deep dive into the BNPL sector and shines a spotlight on each of the major players in this booming market. You can get the full report right now (for FREE) by clicking the button below.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

Keep reading:

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.