1. Consumers SIC 2018 Grant Olcott, Grant Gustein, and Sean Howard
Mindbody Buy Pitch
Consumers SIC 2018
Grant Olcott, Grant Gustein, and Sean Howard

2. Wellness Industry: growing at 10.6%
Early stages of growth; origins in 1970s
Americans spend $30B a year on complementary health approaches (National Institute of Health)
360 degree wellness
Most retail companies are out of touch with millenials, older, slower growth

3. Leading SaaS Platform for large and growing global wellness services industry: beauty, yoga, fitness, ect.
Scheduling, online booking, staff management, CRM, PoS, Payments, Marketing, analytics
Founded 2001; app released in 2015
Rick Stollmeyer: CEO since 2004
One-stop shop, reliable experience
Inc. Magazine top 500 fastest growing companies in the US, since 2008
Mindbody: Background
products

5. Growth and Moat Booker Software Punchpass Acquired for $150M
Adds 10,000 new providers
Additional integration
Provider size
Functionality
Security

7. ~59,000 subscribers ($125+/month) Diverse base Scalability
Reach
~59,000 subscribers ($125+/month)
Diverse base
Scalability
Urban expansion
Patents (US, CA, CN, EP, WO)
System that gives listings of wellness providers to employers based off geographical proximity
Trademarks
Brand recognition, trust, loyalty

9. Quantitative Analysis
Mindbody
Square
Intuit
Current Ratio
8.70x
1.70x
0.60x
Debt to Equity
0.06x
N/A
0.95x
Gross Margin
71.60%
85.95%
84.80%
Rev Growth
37.10%
29.60%
10.30%
Rev. per subscriber
         $3,336 
            $8,422 
              $620 
# of countries 40 5 32
Price
42.2
54.89
178.59
P/CF
12.49
84.53
533.69
P/Sales
10.89
9.93
8.42
Quantitative Analysis
CR: converted to cash within the next 12 months
Positive net working capital
Only uses 6% debt for financing

10. Intrinsic Valuation Assumptions (from Investor Overview):
Based on 42% CAGR since 2012, growth rates for respectively, 30%, 28%, 26%, 24%
Gross Margin: 82%
R&D per sales: 13%
SG&A: 8-10%
EBITDA: 30%
15% required return; 3.5 Beta
DCF Intrinsic Value: $48.47
Base case upside: 18.23%
Bull: 35.12%
Bear: 7.27% 
Intrinsic Valuation
Fairly risky, return of 12%
Beta of 4.59

11. SWOT (Strengths, weaknesses, opportunities, threats)
Adapts to shifts in cultural tastes:
Yoga to MMA to Tanning
Maintains a diversified client base:
Fitness, Wellness, and Beauty
Benefits from Network Effects:
Clients and consumers magnify one another’s impact with every additional member
Benefits from demographic changes:
Urbanization clusters clients and consumers
Millennials and Generation X are hip
Expanding internationally:
Operates in 40 countries and growing
SWOT (Strengths, weaknesses, opportunities, threats)

12. SWOT (Strengths, weaknesses, opportunities, threats)
Requires a demanding growth model:
Increase in subscribers AND an increase in the amount spent per subscriber (Very price sensitive)
Focuses on upmarket clientele:
A shift in cost preferences could require a new market strategy
Holds greater liabilities with recent expansion:
Compliance costs with local laws and regulation
Requires venture capital trust:
Cash infusions are fundamental to current growth
SWOT (Strengths, weaknesses, opportunities, threats)

13. SWOT (Strengths, weaknesses, opportunities, threats)
Momentum to operate internationally:
Globalization turns local trends global
Tap into unorthodox demographic groups:
Older generations are becoming comfortable with tech
Grow through M&A:
Acquire new subscribers (Booker)
SWOT (Strengths, weaknesses, opportunities, threats)
Threats
There is competition:
Vagaro, Square, and Intuit
Requires constant innovation to win:
Needs to offer new, effective features to stay hip
Cyber-security
Liabilities (Equifax)

14. Conclusion
Buy MB, price target at: $48.47