Sales forecast for this year as provided at AGM = $172m - $180m
For next year = $206m-$225m, allowing "20-25% pa" growth rate
So EV/FY17 sales = 4.4x-4.6x
EV/FY18 sales = 3.5x-3.9x
This is relatively depressed EV/sales for a global SaaS leader in its vertical niche, especially with a TAM of size being pursued. The reasons for the depression been debated on HC and could of course continue for a little while. 8-10x more normal for a vertical leader the growth rate ACX showing.
You're correct that SaaS earnings grow faster than revenues because SaaS costs don't grow as fast as the top line. It's known as scalability of the solution. Ultimately it means ACX will spin off cash at scale.
ACX Price at posting:
$4.32 Sentiment: Buy Disclosure: Held
