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  • lawbrig lawbrig Nov 11, 2009 9:15 PM Flag


    I'm a long-time user (since 2001) of and love the product; just not sure the stock is worth a 35x multiple. I would accept that price if earnings were going to double within the next year or 18 months, but that is far from obvious at this point - growth is relatively modest at 20% and churn is close to 50%. Genealogy is a big hobby and they have a great market position with a good value proposition (I can fly to Salt Lake City to do research or spend $300 p.a. on a subsription at - guess which is cheaper), but I suspect that most serious genealogists are already familiar with the product. New users are likely to be less serious and will result in growing churn. I'm not sure how they came up with this valuation. I'd be a buyer when the price moves closer to $10 per share, which would still be a 25x multiple.

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    • I'd used P/S not P/E for near term valuaton. Most of the earnings are getting eaten up in the huge Ad push going on now. Culminating in the SJ Parker NBC show series starting tonite.

      Once they get more users (and the NBC show will assure a spike up just like the BBC show did in UK), they can ratchet back on the ad spending and voila the earnings spikes up.

      Instead give it a 3x P/S ratio (typical for a software company that's growing, maybe even conservative). And sales could double quickly after NBC series.

    • i agree, i had no idea 38 million shares, were out there
      they sold 7.4, and the pe firm retailed 53 percent ownership, so i figured there was around 15 million shares, or about 250million market cap
      i bought this at 14.25
      and think i overpaid
      thats why i hate ipos, as this information doesnt come out, until a week after the ipo.
      where could i have found that there was 38 million shares outstanding, before the ipo came out? nowhere that i know.
      even they make .50 cents this year, which is a stretch, we are talking about 28 times earnings, not overly expensive, but no deal as it first looked.