LoopUp (LON:LOOP)
Share Price 167.5p (up 12% today)
Bid/Offer 165p – 170p
Market Cap £70.9m Enterprise Value £81.2m
Normal Market Size 1,500
About the Company
LoopUp (LON:LOOP) came to the market in August 2016 priced at 100p. The share has risen nearly 67% on better prospects recently announced by the company.
Loop Group plc is a standard conference call technology firm which started in business back in 2006. The company was loss-making for many years at the net profit level, with the first profits expected at this year-end.
The Product
The typical LoopUp meeting gives the call conferencing organiser the .......
• Ability to create a meeting and invite directly from Microsoft Outlook in two clicks
• A ‘call start alert’ to their desktop and mobile/tablet devices as soon as their first invited guest joins the meeting
• The real-time readout of all guests on the meeting,
• LoopUp calls out to the guests on the phone of their choice when they are ready to join, rather than requiring them to dial in with access codes
• Ability to identify who is speaking at any given moment
• Ability to identify who has distracting background noise and mute their line
• For larger meetings, ability to put all guests on mute
• Ability to click-to-record, on demand
• Ability to quickly and easily share their screen with guests at any moment, during any meeting, with a single click of a button
• Ability to allow other guests to share their screen at the host’s discretion
Valuation
Can the company justify the current valuation is the question? A few days spent mulling over the facts has left me uncertain whether to buy or ignore the stock altogether. Dare I risk it? Certainly, the company's current p/e over a 100 would give an investor a nose bleed. The market cap is at least 6 times sales revenue.
The Positives
The Group does have high recurring revenue growth. The revenue from the LoopUp product was £9.2 million out of the Group's total £10.1 million in FY2015. LoopUp is primarily sold on a pay-as-you-go basis, while a monthly subscription is also an option.
The company claims to have 35%+ growth in revenue with similar growth expected next year. Growth has been continuous for last sixteen quarters. This may give a more reasonable valuation on a forward p/e for a growth stock.
The company has the ISO…
