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Sopheon is heavily undervalued in my opinion. ARR now stands at $24.3M. If we apply the sector average ARR multiple of 9.7 (source: https://sharpsheets.io/blog/arr-multiples-benchmark-saas/) this gives a market value of $236M which translates to a share price of $22 (£18).
This would still be a conservative valuation; since the ARR is growing substantially; and Sopheon is financially healthy and debt-free. While that 9.7 average also includes a lot of companies that are not..
And while ARR is a recognized valuation metric for SaaS companies; one could still argue using that specific multiple is cherry-picking. So then let's look at the valuation based on revenue in general. Revenue for 2022 was $36.1M. Sector average revenue multiple is 5.2 (source: https://aventis-advisors.com/saas-valuation-multiples/) -> this results in a market value of $187.72M which translates to a share price of $17.7 (£14).
So that's a 100% - 200% upside potential. And this is short-term, based on 2022 results.
2023 has started with a revenue visibility increase of $5M already; it will undoubtedly yield another substantial growth step.
There are more ways to valuate the company; but no matter which you choose; the outcome will be (much) higher than the current stock price.
Thanks for your input, with which I agree. Can you, however, how many companies share the sector with SPE? I had always thought that they occupied a fairly small niche, which is part of what attracted me to them many years ago. I’m not trying to undermine your research, I’m genuinely interested in the scale of the sector. Thanks
Well done to SPE shareholders on probably doubling their money overnight.
This bodes well for Parity (PTY): market cap. £1.91m. at 1.85p, 2022 revenue £40.6M.
PTY's net debt as at 30.6.23 was only £0.7M., and the company was close to EBITDA break-even.
PTY may well currently be considering takeover overtures.
I urge EVERYONE with Sopheon shares to contact their broker ASAP on how to cast your vote. That is, if you want to vote of course. But I would strongly advise to do so, whether you're against or in favour of the bid from Wellspring/Resurgens. Your broker can cast your vote by proxy and there is only a small cost involved.
I personally think it is a ridiculous lowball bid, so I will vote against it. See my initial post for the reasoning behind this.
They will for sure make a higher bid if the initial voting falls short.
The voting requires both a majority in number of voters as well as 75% of total share capital. Because also a majority in number is required even small shareholders can make a difference, as long as we cast more individual votes than the few very large shareholders (the 41% that is already committed to the offer is a large percentage but only a very small number of voters (handful of directors + Rivermore).