It has a similar profile (high profitability, slow growth) to 2 SAAS (Citadel and DWS) which were recently acquired, at a higher level of valuation. Citadel was acquired on the basis of an EV/EBITDA of 15 x. I just fear that this kind of company can remain undervalued, as long as there is no offer on it. The main problem : it is quite value, while the investors are looking for growth in such a sector. The other problem now for Readytech : unlike what was indicated in their prospectus (targeting a payout ratio of 40 % to 60 %), the company has not paid a dividend for FY 20 (first year of listing).
Overall, the stock is quite cheap and is still traded close to its listing price 18 months ago. It probably needs something else to attract the attention of the market.
RDY Price at posting:
$1.86 Sentiment: None Disclosure: Not Held
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