Jan 28 • 4M

How Much is Each "Subscriber" Worth?

Investors believe in subscription services, but putting hefty valuations on companies has shown its cracks

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Good morning everyone 👋🏼!

Welcome to Cedar Grove Capital — your source for actionable insights, industry deep-dives, and single name coverage in the consumer(tech), and cannabis industries. If you are new, you can join below. Please hit the heart button if you like today’s newsletter and reply with any feedback.


Enterprise Value per Subscriber

Source: Company financials. *Starts at 6/1/21, **10/27/21, ***1/20/21.
Source: Company sites and financials.
  • With high growth startups taking a beating over the last year, premiums investors have put on valuations for subscriber growth have shown their cracks

  • High flyers like Rent the Runway (RENT), Hims (HIMS), and Bark (BARK), saw their EV “dollar amount” per subscriber crater 85%, 89%, and 90% respectively since they went public

  • Seeing the difference between these two dates shows just how euphoric the market was during peak COVID

  • When looking at other subscription service stocks, it’s best to use this metric to sense check how much investors are placing on each subscriber for how much they actually charge

  • Introducing you to this metric can also help you get creative with other metrics in other industries where similar KPIs exist


Until next week,

Cedar Grove Capital

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Disclosure: I/we currently have a stock, option, or similar derivative position in BARK (BARK) and Rent the Runway (RENT) at the time of writing this article.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. This article is not meant to be taken as investment advice and you should do your own due diligence prior to taking any action.