Insights

Why the Pushpay (ASX:PPH) share price could be a growth opportunity

Pushpay Holdings Ltd (ASX:PPH) is a fast-growing ASX share that has been picked as a good idea by fund manager Eley Griffiths.
The post Why the Pushpay (ASX:PPH) share price could be a growth opportunity appeared first on Motley Fool Australia. –

asx growth shares

The Pushpay Holdings Ltd (ASX: PPH) share price could be a growth opportunity with high performing fund manager Eley Griffiths investing in the business earlier this year.

An overview Pushpay’s operations

Pushpay says that it provides a donor management system, including doner tools, finance tools and a custom community app and a church management system. Its key target market is the large and medium US church sector.

Not too long ago, Pushpay acquired Church Community Builder which provides software as a service (SaaS) church management system, also in the US. Its platform can be used by churches to connect and communicate with their community members, record member service history, track online giving and perform a range of administrative functions.

Pushpay says that the combined offering of Pushpay and Church Community Builder delivers a “best in class, fully integrated church management system, custom community app and giving solution for customers in the US faith sector. The combined offering from Pushpay and Church Community Builder is called ChurchStaq.

In its FY21 half-year result, the company said that sales of its combined offering outperformed internal expectations which reinforces management’s hypothesis that the majority of customers prefer an integrated end to end solution.

The Pushpay share price has gone up by 189% since the COVID-19 crash low of 16 March 2020. However, it has fallen 14% since 28 October 2020.

Eley Griffiths’ thesis

Fund manager Eley Griffiths took up a position in Pushpay a few months ago.

Manager Ben Griffiths pointed out that the religious donation market is estimated to be around US$100 billion in the US, with Pushpay’s current addressable market being around US$50 billion. In FY20 it had a market share of around 10%.

Mr Griffiths stated that over the last 12 months it has become clear that Pushpay is at an inflection point for both cashflow and earnings. It has transitioned into the phase of growth where it’s optimising and monetising the business. He thinks the accounts are very conservative in how it reports, which is rare for a small cap.

His bottom line is that the next few years for Pushpay will be rewarding and that COVID-19 will accelerate the ongoing trend of donations changing from cash to digital giving.

FY21 half-year result

Yesterday the Pushpay share price dropped 12.7% after the ASX share announced its FY21 half-year result.

It reported large growth across a range of statistics.

Operating revenue increased by 53% to US$85.6 million. Pushpay said it expects to see continued revenue growth as the business executes on its strategy, achieves increased efficiencies and gains further market share in the US faith sector. The ASX share’s total processing volume went up by 48% to US$3.2 billion. 

Pushpay’s gross profit margin improved by three percentage points, up from 65% to 68%. It expects its gross margin to stabilise at around the current level over the rest of FY21.

It boasted of expanding operating margin in relation to its expenses. Compared to operating revenue growth of 53%, the total operating expenses only went up 16%. As a percentage of operating revenue, total operating expenses improved by 12 percentage points, from 50% to 38%. Management expect “significant” operating leverage to accrue as operating revenue continues to increase, while growth in total operating expenses remains low.

Its earnings before interest, tax, depreciation, amortisation and foreign currency (EBITDAF) jumped by 177% to US$26.7 million. The company increased its EBITDAF guidance again to a range of US$54 million to US$58 million.

Pushpay’s net profit more than doubled to US$13.4 million and operating cashflow went up 203% to US$27 million.

Current valuation

Using data from Commsec, Pushpay is expected to generate earnings per share (EPS) of 26 cents in FY23. That translates to 29x FY23’s estimated earnings at the current Pushpay share price of $7.63.

Where to 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 are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of June 30th

More reading

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 PUSHPAY FPO NZX. The Motley Fool Australia has recommended PUSHPAY FPO NZX. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Why the Pushpay (ASX:PPH) share price could be a growth opportunity appeared first on Motley Fool Australia.

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!