ZipTel Limited (ASX:ZIP) has demonstrated strong user growth momentum as it released its latest figures showing two million installs of its application.
User growth is accelerating reaching two million six weeks after reaching one million installs. Monthly active users were August were 1.25 million, 62% higher than in July. The strong momentum appears to be carrying over into September as monthly users have already reached 1.8 million.
ZipTel’s Chief Executive Officer Bert Mondello is “pleased with the continued performance” as he believes ZipTel is on track to reach 10 million users within 18 months. He commented further: “Both user growth rates and revenues remain ahead of expectations. The recent launch of the in APP video calling feature is expected to be a real driver of further growth along with the imminent launch of the iOS version.”
ZipTel listed on the ASX in July 2014 via a reverse takeover of Skywards Limited raising $5 million. The global launch of its “ZipT” app occurred on 22 June 2015. During FY15 ZipTel achieved revenue of $98.3T. The telecommunications company provides international roaming calls and calling solutions through its primary app Zipt, which enables users to send SMS and make international calls for free. The company believes its competitive advantages are the high quality connections, no lock-in contracts and its ability to use less data than its competitiors.
So far 5.8 million calls were placed and 800,000 SMS sent generating total revenue of $380,000 which the company says is “well ahead of expectations.”
In the short-term the company plans to launch the Zipt iOS version of its application as well as full marketing and customer acquisition activities to drive growth.
ZipTel’s Share Price
ZipTel’s share price has more than tripled so far this year and is up 550% in the past 12 months. The market values ZIP currently at more than $90m as speculative buyers hope that the strong revenue growth momentum of the past few months will translate into positive earnings. Whilst revenue is increasing, it is hard to justify its valuation based on current data as the market is pricing in accelerating future growth.
Author: Simon Herrmann
Sep 21, 2015
Simon is a financial analyst at independent research firm Wise-owl specialised in small-mid cap growth opportunities and ethical investment opportunities. Simon's aim is to disrupt the cliché approach to investment decision making as he believes that socially and environmentally responsible behaviour is a necessity to long-term wealth creation. Simon has a deep fundamental understanding of the global financial landscape and has compiled 300+ research reports, valuations and corporate appraisals. Simon is commonly featured in major media outlets and his research is published weekly in The Australian.