It's amazing how many times something can be staring you in the face and I still miss it.
Back in October 2014, I wrote this article on 1-Page Ltd (ASX: 1PG), suggesting it could be worthwhile adding to your watchlist.
The company looked attractive then, but has seen its share price soar by 731% since that article, and is close to being up 1,000% since listing.
So what's behind this company's phenomenal share price rise, and is there more to come?
Perhaps a quick overview of what 1-Page does is in order.
The company offers three platforms to find new employees (Source), evaluate and test (Assess) job candidates and then allow existing workers to engage with the company (Innovate) through innovative proposals.
The sourcing platform currently contributes 70% of the company's revenue, and consists of a database of 1.15 billion professional profiles and social connections to existing employees. This allows employers to leverage their employee's contacts and relationships to get referral hires.
Referral hires are bigger, better, faster and stronger according to 1-Page, with the fastest hiring process, best retention rates after two years and at cheaper rates than existing methods, such as going through an employment agency.
In the past year, several large companies have signed on with 1-Page, including the likes of Amazon, Pandora, Red Bull, Sears, Fitness First, Orange and accounting firm Accenture. Around 10 new agreements have been signed this year alone.
One of the biggest drivers of a company's success is if it provides an easy way of saving money and time. 1-Page certainly seems to have the ability to build a competitive advantage through a 'network effect' – the more companies it signs up, the greater its source database of potential new hires becomes, encouraging more employers to sign up and so on.
By the end of this calendar year, 1-Page says it expects to have 125 paying clients signed up – although around 90 will be on 'evaluation' flat rate pricing. In 12 months, the company expects to have 125 clients paying on individual 12-month enterprise contracts.
Foolish takeaway
Despite the 731% gain in the share price since October, there could be more gains ahead – if the company's strategy works out as planned. The one issue is that 1-Page is currently unprofitable and trading at close to 1,000x sales. That means a lot needs to go right for the company in order for shareholders to see a return on their investment at current prices.
By contrast (and it's a rough comparison to be fair), cloud accounting firm XERO FPO NZ (ASX: XRO) is trading at around 15x sales. I'll leave you to decide whether 1-Page is worth a punt or not.
