Insights

3 reasons why the Pushpay (ASX:PPH) share price might be a buy

There are a number of reasons why investors might like Pushpay.
The post 3 reasons why the Pushpay (ASX:PPH) share price might be a buy appeared first on The Motley Fool Australia. –

There are quite a few different reasons why the Pushpay Holdings Ltd (ASX: PPH) share price might be attractive to investors.

What is Pushpay?

Pushpay is a technology business that enables US churches to manage their church, connect with their community and process electronic donations.

It also has a business that it acquired called Church Community Builder which offers increased functionality for churches.

Here are three key reasons why Pushpay could be a business to consider:

In-demand service

The world is going increasingly digital. Pushpay is a key business that is helping US churches to go electronic.

At 31 March 2021, Pushpay had over 11,000 customers. Some of them are using the donor management system, some are using the church management system and some use both.

ChurchStaq is the combined offering of both the Pushpay services and Church Community Builder where everything can be accessed through the single service.

With its giving and donor management service it can engage new donors, increase recurring giving, remove barriers to generosity and it offers various forms of donation including web, mobile, text and cash/check.

The ‘My Church App’ allows increased participation, access to church media, targeted communication, groups and calendar and “pre-check”.

ChurchStaq’s church management system is “comprehensive”, it also allows for groups, events, check-in, service planning and prices. There are also giving dashboards and analytics.

Having a strong offering allows Pushpay to attract and retain clients. It has plans to search for other acquisitions that may broaden its current proposition and add significant value to the current business at a quicker pace than what could be achieved organically.

Operating leverage

There are a number of financial measures that show that Pushpay is achieving operating leverage.

In FY21, Pushpay’s operating revenue went up by 40% to US$179.1 million. It reported that its gross profit margin increased by three percentage points for FY21 from 65% to 68%.

Total operating expenses only increased by 9%. As a percentage of operating revenue, total operating expenses improved by 11 percentage points from 47% to 36%.

Pushpay explains that it adopted “best-in-class” software tools and scalable process early in its development. Combined with “strong financial discipline”, these investments will allow significant operating leverage to be achieved as revenue grows.

Net profit in FY21 increased by 95% to US$31.2 million and operating cashflow went up 145% to US$57.6 million.

Pushpay says it expects significant operating leverage to accrue as operating revenue continues to increase, while growth in total operating expenses remains low.

Growth plans

Pushpay has embarked on serving the Catholic segment. It’s focused on establishing relationships and increasing engagement with key stakeholders. In FY22, Pushpay is expecting to invest between US$6 million to US$8 million.

The company expects the benefits from the Catholic segment to be realised over the course of the next financial years.

It has set of goal of market share of more than 25% of the Catholic church management system and donor management system over the next five years.

Pushpay pointed out that the Catholic church is closely associated with many education providers and non-profit organisations, which presents further opportunities within the US and other international jurisdictions.

The company has previously stated that international growth to regions like South America and South East Asia.

What is the Pushpay share price valuation?

According to Commsec, Pushpay shares are valued at 30x FY22’s estimated earnings.

The post 3 reasons why the Pushpay (ASX:PPH) share price might be a buy appeared first on The Motley Fool Australia.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of May 24th 2021

More reading

Here’s how some of the top ASX SaaS shares performed in FY21

2 high-quality ASX tech shares that could be buys

Here are the 5 worst performing ASX 200 tech shares from FY21

Why the Pushpay (ASX:PPH) share price is under pressure
2 impressive ASX shares that could be buys in July 2021

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended PUSHPAY FPO NZX. The Motley Fool Australia owns shares of and has recommended PUSHPAY FPO NZX. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!