Every technology gold rush has two trades. There are the miners everyone chases, and there are the unglamorous companies that sell the safety equipment without which the mine cannot legally operate. In the AI rush the market has bid the miners to the sky, yet it has left one of the safety-equipment makers more than 40% below its high, even as its revenue, its recurring base and its margins all keep climbing.
This company is a profitable software business that grew revenue 26% last quarter to $117 million, lifted annual recurring revenue 26% to $435 million, and has now compounded its recurring base at double digits for twelve consecutive quarters. It generates more than $100 million of free cash flow, buys back its own stock, and is backed by one of Asia’s most respected sovereign investors. Despite all of that the share price has fallen roughly 41% over the past year.
Is this a broken growth story or a mispriced gem? I think it is the latter, and so does the street, because of the analysts with active ratings eleven say buy and four say hold while none say sell.
The information or opinions provided are personal views and do not constitute investment advice, a recommendation, an offer, or solicitation to subscribe for, purchase, or sell the investment product(s) mentioned herein.
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