Consensus community valuation
$6.47
Average Intrinsic Value
7.8%
Undervalued by
Active Member Straws
#H1 FY20 Results
Added 5 months ago

Wow, experiencing significant buyers remorse with this one.  

1) Revenue up about 126%

2) Expenses up 266%!  Ok, there has been significant investments in USA.  

3) Churn.  Registered clients grew by 122K over pcp, yet this converted to just 56K active clients.   Churn looks very high, and this is a real concern, as marketing costs are $168 per registered client.

I don't like the high churn rate, and PBH is up against Draft kings and Fan Duel.   Tough competition with deep pockets.   PBH may suceed, but given they are not the top dog, the probability of this is below 50% IMHO.   

 

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#Bear Case
Added 6 months ago

Livewire Markets's 'Buy, Hold, Sell' video - Two fundies rate PBH a 'HOLD' and 'SELL' due to:

  • Amount of money being spent to acquire customers
  • Concerns about ability to compete against large established competitors

https://youtu.be/1VHsVRfuANo

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#Bull Case
Added 6 months ago

PointsBet and NBA Announce Multiyear Sports Betting Partnership 

https://www.prnewswire.com/news-releases/pointsbet-and-nba-announce-multiyear-sports-betting-partnership-including-the-nbas-first-win-probability-metric-301003917.html?tc=eml_cleartime

They may be burning cash at an alarming pace but are currently still delivering on the growth story.

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#Industry/competitors
Added 6 months ago

Another US deal in this space. The Wall Street Journal reports, 11/2/20, this deal has the following objective.  "The logic of the deals is sim­ple: Sports books, which sud­denly have an op­por­tu-nity to reach cus­tomers across the U.S., are re­ly­ing on me­dia com­pa­nies to de­liver po­ten­tial bet­tors. Me­dia com­pa­nies, mean­while, are sell­ing ac­cess to their au­di-ences and seek­ing spon­sor-ships for new con­tent aimed at gam­bling en­thu­si­asts."

"Sports-bet­ting op­er­a­tor William Hill US and Vi­a­com­CBS Inc.’s CBS Sports have agreed to a deal that would en­able the gam­bling com­pany to seek new cus-tomers among the me­dia gi­ant’s au­di­ence, the com­pa-nies said Mon­day.  William Hill agreed to pay CBS Sports a fee for ac­cess to its au­di­ence and spon­sor­ships across CBS Sports con­tent, ac­cord­ing to peo­ple fa­mil­iar with the mat­ter. The deal, which in­cludes in­cen­tives for hit­ting cer­tain tar­gets, is aimed at get­ting CBS Sports users to down­load the William Hill bet­ting app and put money into their bet­ting ac­counts, the peo­ple said."
 

PBH is facing the significant competition across the US landscape. While it's app is unique (I am a New Jersey resident and have used it several times throughout the college football season) if people are being driven to other solutions, it will be hard for them to thrive here in the US market. CBS shows major sports events on a national basis. Lots of Eyeballs.

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#Bear Case
Added 4 months ago

As someone who's lived in North America most of my adult life and is a huge sports fan and even bigger fantasy sports fan I think PBH is really overhyped/misunderstood by a lot of Aussies.

They're not first movers and from what I can tell don't have a competitive advantage.  In fact I'd argue their competitors have the advantage of already having a large client base already playing fantasy sports on their sites.  Customer acquisition cost will be minimal for their competitors (fanduel etc).

I haven't delved into them extensively but for this reason I'm very bearish on them.

 

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#Bull Case
Added 3 months ago

Even if not established as #1 provider over Draft Kings, the addressable market is insane. Hoping management leverage their international experience and grow fast in the States. 

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