Organic growth surges further ahead
According to an Aug’18 Gallup poll, there are around 57m Americans, who work at least part-time in the ‘gig economy’. An enormous number, with many still not vetted thoroughly beforehand, in terms of checking for correct licenses, qualifications, training, criminal records and so forth.As such, there has been a steady stream of serious incidents, where ‘rogue’ contractors, financial advisors, chauffeurs, care providers and other casual staff have acted improperly. Not only endangering end-user property/safety, but also harming the brand, and sometimes even breaking the law.
Enter ClearStar, a tech-enabled Human Capital Integrity firm, focusing primarily on this transient workforce within the broader $4bn global background & medical screening market.
This morning the company reported that H1’19 turnover had climbed 17% to $11.6m (vs $9.9m LY), with June up nearly 30%. Sequentially too, Q2’19 LFLs were 22.6% above LY, and more than double the 10.9% posted in Q1.
Going forward, we make no change to either our FY19 forecasts of $950k in EBITDA (pre SBPs) on turnover of $23.0m, or 135p/share valuation. Equally though, we recognise there is scope for upgrades as the year progresses, and look forward in hearing more positive news at the interims in September. At 54p, the stock looks materially mis-priced, trading on 1.0x EV/sales vs 5.3x for peers.
CEO Robert Vale adding: “This was a fantastic period for ClearStar as we delivered strong revenue growth, particularly in direct services, which increased by almost 50%. With an expanding pipeline and a booming US jobs market, we remain confident of achieving strong growth for FY19.â€
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