The Tinybeans Group Ltd (ASX: TNY) share price has gone ballistic in 2019, surging more than 1125% in the past 12 months. The company's share price opened the year at 26 cents and is currently trading at an all time high of $3.30.
What does Tinybeans do?
Tinybeans is a free social media platform developed in Australia, aimed at parents who want to capture, store and share photos and videos of their children within a secure community.
The Tinybeans platform is designed to boost online safety and security and maintain user privacy. The application creates a contained, invite-only environment where parents can upload photos and videos of their kids and securely share the content with an approved network.
Tinybeans currently has an engaged user base of 3.5 million members in over 200 countries and generates revenue through advertising from brands, premium subscriptions and printed products.
How has Tinybeans performed?
Earlier this year, Tinybeans reported earnings for FY19, which saw operational revenue increase 118% from the year prior to $3.9 million. The company also experienced a 31% growth in monthly active users of 1.23 million. In addition, Tinybeans boasts a 76% retention rate for FY19 and is well poised for accelerating growth with a $5.6 million cash balance.
In the company's recent quarterly report, Tinybeans saw revenue increase 91% to $1.12 million in comparison to the prior corresponding quarter. The company's strategy to grow sales and revenue involves partnering with larger brands and it has also made progress in growing its advertising sales pipeline.
What has been driving the Tinybeans share price?
The price action reflects great optimism in the current and future growth prospects of Tinybeans. According to the company, a 'Millennial Moms' report from a Goldman Sachs highlights the market opportunity for goods and services for babies and children. According to the report, US$1 trillion is currently spent in the sector, which is forecast to grow even further thanks to the influence of new technologies.
Should you buy?
Personally, I can't advocate buying shares in a company that has already soared more than 1000% in the year, as that would be poor risk management. The sector looks promising, however I think a more conservative strategy would be to keep Tinybeans on a watchlist and wait for a substantial pull back before making an investment decision.
