It is soon two months ago since we compared the three listed alternative finance providers, TrustBuddy (TBDY:SS), Lending Club (LC) and On Deck Capital (ONDK). Since then, the companies published their FY 2014 reports and we have seen a positive development in the stock market in general.
Now that analysts have updated their estimates, we thought it was a good time to update the peer group valuation for the sector:
- According to data provided by Yahoo Finance, analysts expect Lending Club to report 2015 revenues of USD 379m and an EPS of USD 0.06. In combination with an enterprise value of USD 9.21bn and a share price of USD 19.50, this implies a 2015 EV/Sales multiple of 24x and a PE-ratio of 325x respectively. For 2016, the numbers are 15x and 93x respectively.
- For On Deck Capital, analysts expect 2015 revenues of USD 255m and an EPS of -0.15. In combination with an enterprise value of USD 1.53bn and a share price of USD 19.5, this implies a 2015 EV/Sales multiple of 6x and a negative PE-ratio. For 2016 the numbers are 4x and 35x.
- There are currently no analysts covering TrustBuddy so we are forced to use our own estimates. In its recently published quarterly report, TrustBuddy stated that it is committed to report a profit for 2015, following investments in IT and its organisation which burdened 2014 numbers. With a current enterprise value of SEK 322m, TrustBuddy is currently trading at a 2015 EV/Sales multiple of around 2.5x and a 2015 PE-ratio of around 135x. For 2016 the numbers are 0.2x and 9x.
Here is the peer group valuation in summary:
TrustBuddy looks tremendously undervalued compared to its listed peers. This is partly due to the fact that it is listed in Sweden and that no analysts are currently covering the company. It is, simply put, still under the radar of most international investors. However, TrustBuddy is actually the most diversified of the three listed companies and we believe that it is only a matter of time until this mispricing will disappear.