The Macquarie View

Action and recommendation  On our revised forecasts ISD is trading on a FY17e PER of 17.3x and EV/EBITA 12.8x, which is relatively in line with the Emerging Leaders Industrials (16.7x / 12.9x) despite ISD’s above-average growth outlook. With other parts of the business growing nicely (Asia, King Content, ANZ VAS) we think ISD’s market multiple more than captures a subdued FY17 for ANZ SaaS. We appreciate why some would prefer a ‘wait and see’ approach given the negative reaction to ISD’s last result and that ISD is likely to provide FY17 earnings guidance. Regardless, we continue to like ISD and see potential for a re-rate over the coming 12 months as KPIs improve and investors begin to once again to place value on ISD’s organic growth potential. Retain O/P