At a market cap now in excess of $400M, i think RUL is increasingly unhidden rather than hidden. That said, i think the "re-rate" RUL is experiencing is justified - the fact that FY21 results (in terms of software sales) are going to blow past FY20, despite FY21 being a difficult year with COVID, is indicative of a business that is firing on all cylinders.
The reality with RUL is that it is growing its ARR faster than market darlings such as OCL (which i think is the best "comp"), PME and ALU, and those three businesses trade at mind-bending EV/revenue multiples in the 20-30x range. I would never underwrite those sorts of valuations as sustainable, but it does contextualize RUL's valuation today - 1yr forward, RUL is probably doing >$30M ARR with a <$400M EV, so still nowhere near the multiples of the true market darlings (OCL, PME, ALU etc.), and RUL is earlier in its SaaS journey and growing faster.
RUL Price at posting:
$1.77 Sentiment: Hold Disclosure: Held
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