Editing Stockhub

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|+ Key information

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* The mission of the company is to help make more money for everyone (and not just the wealthy!).<ref name=":1" />

*The company is led by the former principal investment analyst of one of the world's wealthiest persons.

*The Stockhub company estimates that the expected return of an investment in the company over the next five years is 55x<ref>The calculation of the investment return figure can be found in the 'Valuation' section of this report.</ref>. In other words, an £1,000 investment in the company is expected to return £55,000 in five years time.

* The degree of risk associated with an investment in Stockhub is higher than in a company that's say trading on a public market (such as, HSBC).

Stockhub Limited is a company that’s on a mission to help make more money for everyone (and not just the wealthy!).<ref name=":1">https://wiki.stockhub.co:447/main/index.php?title=Stockhub_Wiki:About</ref>

====Who’s the target audience of the company’s flagship product?====

The audience is Active Investors, who are a group of people that are willing and able to be actively involved in the process of finding suitable investments.

[[File:Stockhub report example.png|centre|400px]]

===What's the biggest achievement of the company? ===

===What's the next key milestone of the company?===

==Market==

==Competition==

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|Type of production method?||Crowdsourced information, decentralized production||End-user-paid-for, crowdsourced information, centralized production||End-user-paid-for, insourced information, centralized production||Sponsor-paid-for, insourced information, centralized production

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| colspan="5" style="text-align: center;" |What are the main features of the research for the end-user (i.e. Investors)?

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==Team==

===Chief Executive Officer===

[[File:Richard Gill.png|200px]]

==Financials==

In keeping in-line with industry standards, the number of years of financial forecasts shown below is five years.

|+Income statement<ref>Source: Stockhub Limited</ref><ref group="Note" name="Note04" />

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| colspan="3" |<div style="text-align: center;">'''Revenue'''</div>

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|£635,325,000,000

|Here, the total addressable market (TAM) is defined as the global advertising market, and based on a number of assumptions<ref group="Note" name="Note01" />, it is estimated that the size of the market as of today (14th March 2022), in terms of revenue, is £635 billion (or $850 billion).

|What's the estimated Stockhub peak market share?

|2%

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|Which distribution function do you want to use to estimate Stockhub revenue?

|Research suggests that the revenue pattern of companies is similar to the pattern produced by the Gaussian distribution function  (i.e. the revenue distribution is bell shaped)<ref>http://escml.umd.edu/Papers/ObsCPMT.pdf</ref>, so Stockhub suggests using that function here.

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|50 years

|Stockhub's vision is to be a large organisation (more than 10,000 employees), and research shows that the average lifespan of a large corporation is around 50 years.<ref>Stadler, Enduring Success, 3–5.</ref>

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|5 years

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|4 stages

|Research suggests that a company typically goes through four distinct stages of cash flow growth.<ref>Levie J, Lichtenstein BB (2010) A terminal assessment of stages theory: Introducing a dynamic approach to entrepreneurship. Entrepreneurship: Theory & Practice 34(2): 317–350. <nowiki>https://doi.org/10.1111/j.1540-6520.2010.00377.x</nowiki></ref> Research also shows that incorporating those stages into the discounted cash flow model improves the quality of the model and, ultimately, the quality of the value estimation.<ref>Stef Hinfelaar et al.:, 2019.</ref>

|Research suggests that given the expected lifespan of the company (i.e. 50 years), 17 years is suitable for stage 1.<ref name=":6">http://escml.umd.edu/Papers/ObsCPMT.pdf</ref>

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|4 years

|Research suggests that given the expected lifespan of the company (i.e. 50 years), 4 years is suitable for stage 2.<ref name=":6" />

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|8 years

|Research suggests that given the expected lifespan of the company (i.e. 50 years), 8 years is suitable for stage 3.<ref name=":6" />

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|What's the expected duration of growth stage 4?

|Research suggests that given the expected lifespan of the company (i.e. 50 years), 21 years is suitable for stage 4.<ref name=":6" />

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| colspan="3" |'''<div style="text-align: center;">Growth stage 1</div>'''

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|20%

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|Selling, General and Administrative expenses margin (%)

|80%

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|Tax rate (%)

|Research suggests that it's best to use the marginal tax rate of the country in which the company mainly operates. The Stockhub company mainly operates in the United Kingdom, and the marginal tax rate there is 19%.

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|Depreciation rate (%)

|10%

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|Fixed capital margin (%)

|25%

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|Change in working capital (£000)

| colspan="3" |'''<div style="text-align: center;">Growth stage 2</div>'''

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|20%

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|Selling, General and Administrative expenses margin (%)

|60%

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|Tax rate (%)

|Depreciation rate (%)

|10%

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|Fixed capital margin (%)

|25%

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|Change in working capital (£000)

| colspan="3" |'''<div style="text-align: center;">Growth stage 3</div>'''

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|20%

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|Selling, General and Administrative expenses margin (%)

|40%

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|Tax rate (%)

|Depreciation rate (%)

|10%

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|Fixed capital margin (%)

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|Zero

|Stockhub suggests that for simplicity, the change in working capital figure is zero.

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|Selling, General and Administrative expenses margin (%)

|40%

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|19%

|Research suggests that it's best to use the marginal tax rate of the country in which the company mainly operates. The Stockhub company mainly operates in the United Kingdom, and the marginal tax rate there is 19%.

|Depreciation rate (%)

|10%

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|Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />, and the margin for its peers was 25%.

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|Change in working capital (£000)

|Stockhub suggests that for simplicity, the change in working capital figure is zero.

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For those in the UK: Stockhub is SEIS and EIS eligible, a key benefit of which is that those who invest now can claim back up to 50% of the investment amount in income tax relief. Accordingly, the estimated expected return of investing in the business is even higher for UK-citizens (than non-UK citizens).

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|Which valuation model do you want to use?

|Discounted cash flow

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|Which financial forecasts to use?

|Discount rate (%)

|25%

Research indicates that companies in the first stage of the business lifecycle are often held by either undiversified owners or by partially diversified venture capitalists.<ref name=":7" /> Consequently, it does not make sense to assume that the only risk that should be priced in is the market risk; the cost of equity has to incorporate some (in the case of venture capitalists) or maybe even all (for completely undiversified owners) of the firm specific risk.

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|Probability of success (%)

|20%

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| colspan="3" |'''<div style="text-align: center;">Growth stage 2</div>'''

|There are two key risk parameters for a firm that need to be estimated: its cost of equity and its cost of debt. A key way to estimate the cost of equity by looking at the beta (or betas) of the company in question, the cost of debt from a measure of default risk (an actual or synthetic rating) and apply the market value weights for debt and equity to come up with the cost of capital.

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|50%

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| colspan="3" |'''<div style="text-align: center;">Growth stage 3</div>'''

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|10%

|There are two key risk parameters for a firm that need to be estimated: its cost of equity and its cost of debt. A key way to estimate the cost of equity by looking at the beta (or betas) of the company in question, the cost of debt from a measure of default risk (an actual or synthetic rating) and apply the market value weights for debt and equity to come up with the cost of capital.

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|Probability of success (%)

|100%

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|Discount rate (%)

|There are two key risk parameters for a firm that need to be estimated: its cost of equity and its cost of debt. A key way to estimate the cost of equity by looking at the beta (or betas) of the company in question, the cost of debt from a measure of default risk (an actual or synthetic rating) and apply the market value weights for debt and equity to come up with the cost of capital.

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|Probability of success (%)

|100%

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| colspan="3" |'''<div style="text-align: center;">Other key inputs</div>'''

|Which time period do you want to use to estimate the expected return?

|Between now and five years time

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===Sensitive analysis===

#Stockhub peak market share (the default share is 2%)

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|+Stockhub investment expected return sensitive analysis

!50% worse

!Unchanged

|The probability of success rate

|14x

|88x

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|27x

|55x

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Assuming that a suitable return level over five years is 10% per year and Stockhub achieves its expected return level (of 57x), then an investment in the Stockhub company is considered to be a 'suitable' one.

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|+Key inputs

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|In regards to the growth-adjusted EV/sales multiple, for the sales figure, which year to you want to use?

|Stockhub suggests that with sales forecast to grow exponential over the five year forecast period, it's best to use forward-looking data, rather than historic data.

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|In regards to the growth-adjusted EV/sales multiple, for the sales growth figure, which year(s) do you want to use?

|Stockhub suggests that for the sales growth figure, it's best to use Year 6 to 8.

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====Sensitive analysis====

#The growth-adjusted EV/sales ratio (the default value is 42x);

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|+Stockhub investment expected return sensitive analysis

!50% worse

!Unchanged

|86x

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|28x

|+Valuation table

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Note: five years after incorporation (i.e. April 2018), Robinhood’s valuation was $5.6 billion, and it was trading on a growth-adjusted EV/sales ratio of 43x.

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|+Economic links to cash flow patterns

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[[Category:Equities]]

[[Category:United Kingdom]]