Fair statement to consider the stock above the bargain bin value range, but when you say it is too high I don't see the current valuation as stretched, even less so when considering the medium term outlook.
EV/EBITDA @ c. 11x - Considering EV of $500m & SaaS EBITDA of $46m; I understand normalising for the KC drag may be considered optimistic by some but the announcement should provide comfort (closing overseas offices and incorporating content marketing) that they will carry this business at break even moving forward.
The above valuation does not strike me as high for a SaaS company with sticky revenues (Net churn of sub 5% is considered strong for typical SaaS franchises) that should display consolidated high single digit growth (as Asia grows).
Just an opinion and understand some may view the incompetence of the KC acquisition (an adjacency that displayed no synergies and actually unattractive unit economics vis-a-vis SaaS) as a sign of poor mgmt but when considering the revenue over the medium term, sub $2 remains attractive imo. KC is in the rear view mirror and the only real risk (that should be the key focus of investors when reading disclosures) is Meltwater.
ISD Price at posting:
$1.76 Sentiment: Buy Disclosure: Held
