The iSignthis Ltd (ASX: ISX) share price climbed 12% to a record high of $1.36 yesterday and is now up 700% from just 17 cents this time last year.
That makes the returns from other growth stock favourites such as Afterpay Touch Group (ASX: APT) or Pro Medicus Ltd (ASX: PME) look pathetic.
Incredibly with around 1.09 billion shares issued iSignthis now has a market value around $1.48 billion. The company has dual listings in Australia and Germany.
So what's driving iSignthis higher?
The company provides a know your client (KYC) platform that helps payment processors verify a user's ID to meet the anti-money laundering obligations imposed on payment or money transfer businesses by regulators around the world.
Recently for example Afterpay has made headlines due to Australia's AML regulator AUSTRAC demanding an audit of its client ID verification procedures.
More generally any 'AML regulated' merchant that accepts card payments could potentially use iSignthis's products to help it meet regulatory obligations.
It also reports that it provides "payment processing, card acquiring, settlement, IBAN accounts, SEPA transfers and deposit-taking E-Money services."
iSignthis reports on a calendar year basis and for the six months ending June 30, 2019 it reported a statutory loss of $0.7 million on operating revenues of just $7.5 million, but it is forecasting positive EBIT for FY 2019 of $7.7 million.
It also had an actual annualised monthly GPTV (gross processing transaction value) of $830m as at July 31 2019. At at July 2019 it reported it had cash on hand around $13 million.
It's basing the forecast for a big turnaround on some new agreements signed including with the Asia Pacific-based subsidiary of payments giant Visa Inc and as other operational metrics pick up speed.
I must admit to not knowing a great deal about this business, but its valuation of $1.4 billion looks eye-wateringly high compared to its trailing financials or FY 2019 EBIT forecasts.
As such you can definitely count me out as a buyer of iSignthis shares.
I'd prefer to buy a business such as MNF Group Ltd (ASX: MNF). It just reported a full year profit of $15.9 million on revenue of $73.6 million. And the market cap is just $373 million, around one-fifth of iSignthis's value!
