Airtasker Shares put out its Initial Pubic Offering (IPO) earlier this year, today we are going to break down its financials and explore why we see the company as highly overpriced. So we take a look to see Should I Buy Airtasker Shares?
Airtasker Share Price (ART ASX)
Airtasker (ASX ART) is down 42.2% since its high of $1.965 shortly after listing. The 52-week range is 0.880-1.965.
About Airtasker Shares ASX
Airtasker (ASX:ART) is a home-grown Sydney company that provides an online marketplace to outsource everyday tasks. The company was founded in 2012 and has around 2 million users. So should I buy Airtasker shares ASX?
The Airtasker IPO
After the company IPOed on Tuesday, the share price jumped significantly to $1.94 before settling the week at $1.155. Being a hyped IPO, we took interest in the stock and considered buying Wednesday after the hype, but after looking at the financials decided against it.
- Issue Price: $0.65
- Ticker: ART
- Capital to be Raised: $83,700,000
- Expected offer close date: 9 March 2021
- Listing date: 23 March
- Underwriter: Morgans Corporate Limited (Lead Manager), fully underwritten
Financials of Airtasker shares ASX
Airtasker has a debt of $35 million which has been growing the past year. ART also has a very low revenue of $12.6 million and is losing $2 million a year. Here’s a look at its books.
This company is significantly in debt with a very little income stream and less than $1 million cash in hand. It seems the IPO is a desperate call for cash to save the company at this stage.
The Airtasker IPO has been marketed as the next Afterpay, trying to cash in on the hype. The ticker codes are even evidence of this ART vs APT. So, with everyone comparing ART to the next APT, let’s have a look at how they really compare and answer the question: should I buy Airtasker shares?
Is Airtasker the Next Afterpay?
Afterpay’s current price is $105.5 giving it a market cap of 30B, as we all know it has been an excellent growth story the past year.
To make it simple we have summarised the financials of both companies below.
| Company | APT | ART |
| Market Cap | 30B | 453.8M |
| Revenue | 417M | 12.6M |
| Loss after tax | (-79M) | (-2M) |
| Current assets | 458M | 14.7M |
| Total Assets | 2.1B | 21.7M |
| Current liabilities | 219M | 35M |
| Net Assets | 1.7B | (13.8M) |
| EPS | (-0.27) | (-0.71) |
| PE | -loss making- | -loss making- |
| Price/Revenue | 71.9 | 35.95 |
| NTA per share (book value) | 5.36 | -negative book value- |
As we can see ART is burning cash at a high rate and doesn’t have the cash to burn. Both companies are loss-making. However, we can see that APT has a positive book value whereas ART is negative. This is calculated as the net tangible assets per share. Meaning if the company was liquidated today realistically how much would it be worth per share. ART is less pricey in terms of revenue which in these loss-making growth companies is a better measurement of value than PE. However, given its crippling debt and terrible track record, it should be significantly cheaper. For help valuing a company check out our fundamental analysis checklist here.
Raising Capital Already
Just a few short months ART has already completed a placement.
The trading halt relates to a material announcement regarding a proposed equity raising and associated acquisition. The company expects to release further details of the trading halt and acquisition to the market as soon as the institutional placement is completed.
This leaves little room for existing shareholders to participate in the equity raising diluting existing shareholding positions in the market. This proposed equity raising comes a little after the listing in March 2021. It begs the question what exactly are they raising for?
Addition to the All Technology Index
As of the 21st of June 2021 ART was added to the S&P ASX All Technology Index. At the same time, a few more additions were made including one of our favourites, Digital Wine Ventures DW8.
The S&P/ASX All Technology Index launched on 24th February 2020. With the purpose of providing direct
access to ASX’s fastest-growing sector. And features over 30 ‘unicorn companies.’
S&P/ASX All Technology Index – Effective Prior to the Open on June 21, 2021:
- Addition ART Airtasker Limited
- Addition CRO Cirralto Limited
- Addition CTT Cettire Limited
- Addition DW8 Digital Wine Ventures Limited
Should I Buy Airtasker Shares ASX?
Putting it simply we are BEARISH on ART. At this point in time, their fundamentals are poor. Airtasker stock currently does not excite Prophet and we will be staying clear of any investment in this stock. Prophet Invest slapped a bearish rating on Airtasker stock back when it first IPO’d and we maintain this underperform rating.
For lessons on how to analyze a company’s financials and how to value a company, look into our book. Available on the website. https://prophet-invest.com/product/the-gateway-to-investing
Please Remember all Articles Published on Prophet Invest are Opinion only
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