Freelancer Ltd. – Value Analysis (ASX:FLN) : December 4, 2017

Capitalcube gives Freelancer Ltd. a score of 34.

Our analysis is based on comparing Freelancer Ltd. with the following peers – Melbourne IT Ltd, Seek Limited, Carsales.Com Limited and REA Group Ltd (MLB-AU, SEK-AU, CAR-AU and REA-AU).

Investment Outlook

Freelancer Ltd. has a fundamental score of 34 and has a relative valuation of NEUTRAL.

Fundamental Score

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Company Overview

  • Considering peers, relative underperformance over the last year and the last month suggest a lagging position.
  • It’s current Price/Book of 6.48 is about median in its peer group.
  • FLN-AU‘s earnings and EBITDA are both negative which suggest that P/E or Price/EBITDA are not meaningful to make this analysis between operating advantage (ROE) and growth expectations (as suggested by P/E or P/EBITDA).
  • FLN-AU has relatively low net profit margins while its asset efficiency is relatively high.
  • The company’s year-on-year change in revenues and earnings are better than the median among its peer group.
  • FLN-AU‘s return on assets currently and over the past five years has trailed the peer median and suggests the company might be operationally challenged relative to its peers.
  • The company’s relatively low gross and pre-tax margins suggest a non-differentiated product portfolio and not much control on operating costs relative to peers.
  • FLN-AU‘s earnings and EBITDA are both negative which suggest that P/E or Price/EBITDA are not meaningful for an analysis between historical growth (using annualized three-year revenue growth) and investor growth expectations (as suggested by P/E or Price/EBITDA) .
  • The company seems to be over-investing in a business with median returns.
  • FLN-AU currently does not have any debt.

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Leverage & Liquidity

FLN-AU currently does not have any debt.

  • We consider the company to have a Quick & Able profile as it currently does not have any debt. In comparison, the median level of debt as percent of enterprise value for its peer group is currently 10.02%.
  • All 4 peers for the company have an outstanding debt balance.

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Key Liquidity Items

Company Debt/Enterprise Value (%) Current Ratio Interest Coverage (x) Cash Flow To Total Debt (%)
Melbourne IT Ltd 17.53 0.71 8.55 54.39
Seek Limited 14.48 1.56 10.12 30.1
Carsales.Com Limited N/A 1.38 22.15 64.33
REA Group Ltd 5.55 1.23 23.69 55.84
Freelancer Ltd. 0 1.12 No interest exp 999
Peer Median 10.02 1.23 22.15 55.84
Best In Class 5.55 1.56 No interest exp 999

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Company Profile

Freelancer Ltd. engages in the operation of online freelancing, outsourcing, and crowd souring marketplace. It focuses in the areas of website development, logo design, marketing, copywriting, astrophysics, aerospace engineering, and manufacturing. It operates through the Online Marketplace and Online Payment Services segments. The company was founded by Robert Matthew Barrie in 2009 and is headquartered in Sydney, Australia.

Disclaimer

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