While I thought the change in Mgmt was more of the same, apparently it is not. They have re-aligned resources, closed deals and built a sustainable pipeline of business with new products only to add incrementally. Everything had been pushed out, but the new releases are finally coming on top of $15M of recurring revenue tied up under much longer duration contracts than the company has ever had. Fat has been cut and they will no doubt re-invest cash flows into accelerating product development copmpletion and sales development to drive growth going forward. Financials appear to be stable and the company is free cash flow positive from here on out. I feel like we've been waiting forever for this, but the time has arrived. If successful, I suspect this company will be taken out within 18-24 months. At the very least, it should garner a minimum of 2.5X multiple of forward sales (3 x $25M) or close to $3 per share. A takeout at 5X would yield a bit less than $5 per share and still be highly accretive to GWRE after corporate overhead which trades at 8-9X sales.
Great post. The CC Is a must listen.....going forward there appears to be multiple positives. I cannot recall there ever being more participants on the Q&A. I am surprised that at a minimum the stock price is not at least 2X sales which would be approximately $1.60 per share. There have to be some private equity firms that are seriously looking at taking the company private....at the current valuation it is a no brainer. All one would have to do is bring the top line up to $30+ million and in 3 years IPO it at 5X sales.