50% market cap in cash. 7% FCF yield.
This company has it all: undemanding valuation while still growing in an expanding market and activist investors that are pushing for value unlock.
Hi hunters,
Right now, everything that is not AI or datacenter-related is likely to be underperforming. You might try to hop on that train, but you soon realize that everything has gone up fourfold in a matter of months, and everything is already priced in.
What if I were to tell you that there is still a company trading at 2x cash on the balance sheet while growing revenues in the double digits? You would think I would pitch you an unprofitable, capital-intensive, infrastructure-built-out company.
On the contrary, I’m talking about a microcap software company with the following characteristics:
3y revenue CAGR 13%
3y EPS CAGR 46%
Gross margins >75%
Net margins 17%
PEG = 0.8
The cherry on top is that activist investors, including the founders, are pushing to realize the value and have successfully changed the board’s composition.
This company came on our radar when we used our AI resilience framework, which we laid out in this article.
This tool gives a score for how resilient it is against AI disruption.
The score: 74% or resilient.
That’s all we needed to jump into this one.
Let’s dive in