With 14.7m users bidding on over 7.3m projects, Freelancer is the largest freelancing outsourced service & crowd-sourcing forum globally

With 14.7m users bidding on over 7.3m projects, Freelancer is the largest freelancing outsourced service & crowd-sourcing forum globally. The company continues to penetrate this large and deep market worth an estimated US$16bil per annum revenue, versus its FY'14 revenue of US$23mil. A sleek and incrementally improving platform has enabled the company to emerge as one of the fastest growing ASX-listed technology companies. It reports a 87% gross profit margin, an implied sustainable EBITDA margin of 65%, and an incremental ROIC of >30% that is likely to drive compound average revenue growth of more than 30% p.a. over the next five years. As illustrated by the volume of projects listed on FLN's website, CY15 has begun strongly with its platform liquidity tracking above our previous expectations. Further investments in marketing and product initiatives (mobility, Freelancer recruiter etc.) coupled with its expansion into new regions/territories should see its exceptional growth rate continue in the medium term. We reiterate our BUY recommendation, however we move to a DCF methodology (previously EV/revenue multiple) which increases our price target to A$1.46ps (from A$1.38ps). (VIEW LINK)