Via Transportation, Inc. (VIA): A Bear Case Theory

We came crossed a bearish thesis on Via Transportation, Inc. connected X.com by Bleecker Street Research. In this article, we volition summarize the bears’ thesis connected VIA. Via Transportation, Inc.'s stock was trading astatine $26.87 arsenic of January 13th. VIA’s guardant P/E was 833.33 respectively according to Yahoo Finance.

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VIA is simply a precocious nationalist institution with a astir $2.4 cardinal marketplace capitalization that positions itself arsenic a precocious maturation transit bundle platform, but a adjacent introspection of its contracts suggests it operates acold much similar a debased borderline proscription services contractor than a existent SaaS business. A reappraisal of astir 100 nationalist contracts shows that astir each of VIA’s gross is tied to work hours, operator labor, and conveyance utilization alternatively than recurring bundle licenses.

In practice, astir truthful called upsell gross occurs erstwhile municipalities adhd much drivers oregon grow work hours, not erstwhile they acquisition further bundle functionality. Several large customers, including LA Metro and Arlington, Texas, person reduced spending, renegotiated pricing, oregon replaced VIA’s bundle wholly with competing solutions specified arsenic Spare Labs. Much of VIA’s caller maturation is besides babelike connected impermanent national backing programs similar CMAQ and CRP, with deployments often shrinking oregon ending erstwhile subsidies expire.

Portfolio churn intimately tracks these assistance rotation offs, portion reported retention metrics look artificially beardown owed to assistance backed minimum gross commitments and favorable churn definitions alternatively than durable lawsuit demand. Financial reporting further flatters the business, arsenic VIA books sizable upfront implementation fees and recognizes up to 18 months of bundle gross aboriginal successful declaration lifecycles, inflating reported ARR and aboriginal gross margins portion obscuring weakening economics implicit time.

The institution besides excludes security costs from outgo of revenue, placing them successful G&A, a attraction that boosts gross margins and differs from peers specified arsenic Uber and Lyft. With COVID epoch alleviation backing acceptable to expire and agencies already signaling that microtransit programs are unsustainable without subsidies, VIA faces important risk, particularly fixed that astir 40% of microtransit projects neglect wrong 3 years.

Ultimately, VIA exhibits the economics of a labour intensive, subscale transit contractor reliant connected impermanent subsidies and assertive accounting, and astatine valuations comparable to Lyft’s guardant gross nett multiple, the banal could look arsenic overmuch arsenic 60% downside.