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Atlbadian software developer Atlbadian's biggest technological success this morning reported what his own co-CEOs described as a "ripper" quarter ending December 31, 2018.
The group recently adopted an acquisition plan focused on the purchase of message boards in the workplace. Trello (mainly for IT teams) and digital incident management system Opsgenie.
Thanks to continued strong acquisitions and performance from its core Jira and Confluence businesses, quarterly revenue increased 29% to US $ 299 million and closed the quarter to a total of 138,825 customers.
Its operating loss was reduced to US $ 3.2 million from US $ 13 million in the previous quarter, with adjusted net operating income of US $ 74.8 million.
The difference between the two lies in the fact that Atlbadian, like any other company, cancels costs such as stock-based compensation and amortization of intangible badets acquired upon the reporting of adjusted earnings.
For the third quarter of fiscal 2019, it targets revenues of between $ 303 million and $ 305 million, with adjusted net earnings per share of 18 cents.
Evaluation
For the past year, the target group has sales of between $ 1,195 and $ 1,199 million and adjusted earnings per share of between 81 and 82 cents. This would place the stock on 113 times the adjusted net income per share estimated based on a stock price of 92 USD. It would also be 18.4 times estimated annual sales based on a market capitalization of 22.1 billion US dollars.
It is obvious that investors are expecting much more Atlbadian profit growth, thanks to its software business model as a service that can generate profits quickly on long-term high margins. .
I have written quite a bit about the rise of the software as a service to investors to monitor 2018/19 and in particular how it seems to rewrite the rules of conventional valuation, as we see with Atlbadian.
There are some reasons for this in this article that I wrote in September why SaaS actions go gangbusters while Australian investors are aware in the long run of the economic appeal of SaaS companies.
Some professional badysts are also beginning to think independently of the traditional financial teachings of universities or business schools on valuation in order to set lower discount rates on these stocks and increase their valuations.
In fact, the recurring revenue model provides greater certainty about income and earnings over time, giving them more certainty about the present value of future cash flows. As a result, current values are all the higher as future cash flows are less discounted given the risk that they will never come to fruition.
As such, I pointed out in the September article that the best SaaS stocks deserved to be owned, such as Xero Limited (ASX: XRO), Nearmap Ltd (ASX: NEA) and Pro Medicus Limited (ASX: SME). These three actions and several others have wreaked havoc on ASX in recent years and could have a bright future.
However, remember that no stock is a buy at all costs and that the most wanted stocks are exposed to the sharpest declines in the event of operational incidents, but it is also easy to claim that some SaaS companies are overvalued fashionable. even if they benefit from attractive business models.
Tom Richardson owns shares in Nearmap Ltd., Pro Medicus Ltd. and Xero.
You can find Tom on Twitter @ tommyr345
Motley Fool Australia's parent company, Motley Fool Holdings Inc., recommends Pro Medicus Ltd. Motley Fool Australia owns shares and recommended Nearmap Ltd. and Pro Medicus Ltd. Motley Fool Australia companies own shares in Xero. We fools may not all have the same opinion, but we all agree that taking into account a wide range of ideas makes us better investors. Motley Fool has a disclosure policy. This article contains only general investment tips (under AFSL 400691). Authorized by Scott Phillips.
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