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Growth Portfolio: Freelancer Limited (ASX: FLN)

Published 17-JUL-2019 00:00 A.M.


2 minute read

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Overview: Freelancer Ltd ("Freelancer", "the Company") is an Australian-based software company operating the world’s largest freelancing, outsourcing, and crowdsourcing marketplace. Freelancer owns online marketplace and payments company The Freelancer platform has 31.4 million users and 15.1 million posted jobs while Escrow has processed over US$4 billion in transactions. Wise-owl initiated coverage in June 2015.

Catalysts: Following a period of stagnation Freelancer has delivered strong growth across all key metrics during the first quarter of the year, delivering $2m positive operating cashflow. Freelancer's ability to extract value from the Freelancer and Escrow ecosystems via partnerships and vertical product extensions is a major growth driver. Freelancer is well funded with a cash balance of $35 million which allows the Company to strategically invest capital.

Hurdles: The current valuation assumes ongoing growth, which could result in share price volatility if targets are not met. There is no guarantee that Freelancer can continue to grow its ecosystem and maintain its market-leading position. Entry barriers to the industry are limited and Freelancer may be subject to increasing competition.

Investment View: Freelancer offers speculative exposure to online employment and payment service trends through a portfolio of digital assets. Freelancer's management team has a strong track record of value creation and we are attracted to the Company’s growth trajectory, growing ecosystem, and balance sheet. Operational risks, valuation, and competition are primary hurdles. Following a period of stagnation and share price volatility, the recent results suggest renewed growth momentum and a return to the Company's long-term growth trend. Whilst risks are moderate we see strong growth potential and upgrade our view to ‘buy’.


General Information Only

S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.

Conflicts of Interest Notice

S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.

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The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.

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