Author Topic: CRCM - Care.com  (Read 13246 times)

ratiman

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Re: CRCM - Care.com
« Reply #20 on: April 28, 2016, 07:40:31 AM »
Care had a pretty good quarter. It's converting in the App store despite 20% higher fee to users, which is pretty good. What really makes Care interesting is the enterprise business. The enterprise business (Care@Work, serves employees) solves one-half of the problem any marketplace has to solve, demand. The enterprise service provides lots of demand at a near-zero acquisition cost. Care@Work will probably end 2016 with about 1 million employees at $10/employee. About 15% of employees use the service in an average year, so that's 150,000 users compared to the current paying sub base of 266,000. All of that additional demand draws more babysitters, who are increasingly paying for access to the site. So even as the number of paying "retail" subs stalls, the network continues to grow at a decent rate. So overall I think the stock is going to $10 in the near term, It's basically a healthy business with a continuing bottleneck in the Google/Apple app stores (both charge a 30% fee). As the enterprise business grows, the network will become much more valuable, and then Care can sell lots of transactions and services on top of that, like DateNight or taxis (Uber for Kids). 
« Last Edit: April 28, 2016, 08:42:15 AM by ratiman »


DCG

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Re: CRCM - Care.com
« Reply #21 on: April 29, 2016, 11:22:40 AM »
I don't have much to add other than that we've been using Care.com to search for child car and my wife has been complaining about how terrible their site and app are.

ratiman

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Re: CRCM - Care.com
« Reply #22 on: April 29, 2016, 12:09:30 PM »
Is this your wife:

"I have disliked many apps, but never so much as this one that I had to write a review. I thought this app was for professionals, when really, anyone, including child molesters, can post their services for childcare. For $45 you don't get jack crap except more room in your inbox for loonies to fill up. If you don't pay the extra $$ on TOP of the $45 when you sign up, then you have to pay close to $60 a pop for background checks!! Then they put up a disclaimer that you can't trust the background checks. WTH??? I'm sure not everyone on this app looking for a job is heinous, and in fact there may be some great ones I'll never get the chance to meet because this app is not well regulated. It's exactly like Craigslist, except Craigslist is free to browse and contact users. Not nearly worth the money, time or headache this app has caused us."

DCG

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Re: CRCM - Care.com
« Reply #23 on: April 29, 2016, 12:33:33 PM »
ha..no..she definitely hasn't posted a review, but has expressed a similar concern that there is nothing at all preventing child molesters from using the site, and Care.com seems to not care about that at all.
« Last Edit: April 29, 2016, 12:47:47 PM by DCG »

ratiman

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Re: CRCM - Care.com
« Reply #24 on: June 29, 2016, 05:24:40 PM »
Looks like Care is up to $12 after an investment from Google. Unfortunately I sold out in the $9s . . . lol. Somebody timed this for the day before the last day of the quarter so the shorts would be completely screwed.

ratiman

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Re: CRCM - Care.com
« Reply #25 on: November 05, 2016, 11:55:41 AM »
I haven't looked at Care in a while but it looks good here. You're buying it at about $210M EV and $11M ebitda for 2016. The biggest problem and the reason for the recent price decline is an actual decline in yoy US consumer users. To recap, that's caused by the shift to mobile and the 30% tax (15% in the second year) which Apple takes on all app purchases that are subscriptions and not transactions. As a result Care is trying to increase transactional hires (like Datenight) and also sell expensive annual subs in the app store. Anyway the reason I don't think the decline in US consumer users matters is that *Care makes very little money in the US consumer business.* That user base is very valuable but currently Care is having a lot of trouble squeezing cash out of it because of high churn. Nearly all the ebitda is made in the tax business called Homepay. Homepay is a cash cow with low churn and 55% ebitda margins which is great, but it's a boring tax business. The other business is Care@Work.

Here are some comments from management on Care@Work:
 
Our enterprise solution Care@Work is proving to be a significant driver of growth for us and 61% in Q3 versus prior year. More employees are turning to family care benefits as a competitive advantage to help attract and retain talent. 

Our enterprise mobile app gives employees access to on-demand backup care services and our HR dashboard gives quite accurate real time information about utilization. This transparency leads to confidence that their benefits dollars are being spent wisely and we believe it to be an important differentiator relative to our competitors.

In addition, in Q3 we introduced a new Care@Work sales channel with dedicated inside sales reps focused on selling to small and medium-sized companies. Those [indiscernible] than a 1,000 employees now that we've expanded our offering to include SMBís more broadly we estimate that our addressable market is substantially larger.
 
We estimate about a size of about 10,000 companies in the U.S. with more than a 1,000 employees and we've shared before that we believe that anywhere between 2 billion to 4 billion in terms of a TAM. With the SMB opportunity we know that the TAM has grown significantly and we estimated it's roughly north of 10,000 companies.


Admittedly Care@Work is currently a very small business, and will probably only generate between $14M-$16M in 2017. What's important about that business is that it promises a viable way to get Care off the churn treadmill; retention is over 100%, so negative churn, which does wonders for growth and profitability.
 
Care has a large hidden asset in its 20M user base; the cost to recreate that marketplace would be, in my opinion, at least $500M. Care@Work is the way to unlock that value.

Here is managment again:

This contains to be a really large market opportunity for us and we're able to grow and monetize it with limited investment in a sales organization given the investments that we've done on the U.S. consumer side for the main product.
« Last Edit: November 05, 2016, 12:43:10 PM by ratiman »

cameronfen

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Re: CRCM - Care.com
« Reply #26 on: November 15, 2019, 08:55:14 AM »
Anyone looking at buying crcm?  It looks like both the customers and the stock market is starting to forget the hugely negative WAJ article.  Crcm also put more effort into vetting nannies.  You can buy this for around 275 million EV which is only a bit more expensive than 2 years ago and you got about 30% or so growth in revenues.  This is a two sided market but a relatively weak one.  The main attraction is that this seems like a decent business, not as good as upwork so see the discussion there, but is now trading at 2x EV/gross margin.  In comparison EBAY is trading at 3.5x and is growing much slower.  Not really an apples to apples comparison, but sort of highlights the disconnect.   

InelegantInvestor

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Re: CRCM - Care.com
« Reply #27 on: November 15, 2019, 09:18:20 AM »
I agree that CRCM is interesting. Bought in a few months ago on their big drop.

cameronfen

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Re: CRCM - Care.com
« Reply #28 on: December 20, 2019, 07:21:41 AM »
IAC offered to buy this at 15.00.  Stock trading above this level though.