Nitro vs Adobe, page-2

I also think NTO has got their eye on Docusign business. This is extremely lucrative.

Docusign reported 0.17 cents EPS, recent quarter and for FY2021 they are estimating almost $1.38 billion in revenue. Free cashflow to revenue is 30%. These are mind-blowing numbers. An example, they charge 21/month for their basic product.

There's two things that can happen. Either Docusign discounts their price to $10 to gain market share and customers. This won't happen, as soon as Wall St gets a hint that products are getting discounted, share price will take a massive hit and this leads to heads rolling. The chances of this happening is very low.

NitroSign will get an advantage as they just need to work with the price ceiling and give customers, say 50% off Docusign's pricing and rope in some market share. The chances of this happening in a short period of time is very high. If they achieve 2 million subscribers at $10/month, thats about $240 million in revenue just from this segment of their business. They have to keep growing customers.

Nitro will hit A$50 million in revenue this FY. It is quite easy to work their CAGR for 3 years and cashflows and then if you divide their earnings of free cashflows by outstanding shares, It seems to me that current holders are sitting on a gold. Valuation is so cheap. I'm not used to seeing this.

Adobe is quite hard to compare. They charge $33/month. They do have some additional integration built-in. They can't discount as well.

So both the players have given Nitro an environment to thrive. Sam and shareholders will do very well out of this Saas provider.