It was a doozy of a revision. Foster had all the key metrics...

It was a doozy of a revision. Foster had all the key metrics rising strongly but clearly didn't envisage the lower conversion of potential users to actual users amongst other things. They may have access to 320m odd potential customers via their deals but its another thing to get them using and this was shown in the FY14 results with the company having to discount to draw in new users (net commission was down from 2.5% to 2.0%).

It is easy to get caught up in the blue sky but no matter how big the market or potential, valuation discipline and accurate forecasting matters a lot when making money investing, The lofty current valuation and poor ability to really model what is going on and what will transpire is the biggest turn off for me. This doesn't mean the company won't deliver, it appear its will just be a slower longer grind than many thought previously.

For those interested the Fosters note can be found here:

http://www.fostock.com.au/researchreports