From the Eureka Report:
Citi rates ACX as Buy
Tuesday, December 13, 2016 - 16:10
One of the company's competitors, Procore, US-based and thus far solely US-focused, has raised a further US$50m with the intent of expanding into Canada and Australia.
Citi analysts acknowledge this might heat up competition in the Software-as-a-Service construction collaboration software industry, but hardly a dent is expected in Australia where Aconex has an estimated market share in excess of 65%.
Historically both competitors have been focusing on different market segments, explain the analysts, so they haven't genuinely been competing against each other. Buy. Target $8.69 (unchanged).
Target price is $8.69 Current Price is $4.35 Difference: $4.34
If ACX meets the Citi target it will return approximately 100% (excluding dividends, fees and charges).
Current consensus price target is $7.72, suggesting upside of 70.3%(ex-dividends)
The company's fiscal year ends in June.
My understanding is that Citi has an estimated $81.5 M for H1 17 . Sounds about right as the 4 quarters are not flat. Anyway, that is still a very solid YOY of 46.3% growth, which is exactly what they achieved in H1 FY16.
Also understand that Procore were valued at US $1B (AUD $1.35 B) in achieving their cr, but their annual revenue is only $55 M and they are apparently still loss making. They only have offices in the US and have apparently tried unsuccessfully to win projects in Australia before.
They are also now loaded up with some new private investors. Definitely targeting the low to mid sections of the market and number of users was 2 orders of magnitude below ACX, according to their previous ticker. This was from the recent broker briefing, posted to HC by
@bob52.
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This post is based on my own research and is not investment advice. When making investment decisions, always DYOR. Rated GE.
