Shares in ASX listed Siteminder popped a massive 37% on IPO from their offer price of $5.06. We take a look into is SiteMinder a good investment in 2022?
About SiteMinder Shares
SiteMinder (ASX:SDR) is an Australian listed SAAS business that provides software to the hotel market. The company serves over 32,000 properties globally and have customers in more than 150 countries.
SiteMinder’s customers are hotels and other accommodation providers, including vacation rentals, lodges, motels, and enterprise properties. Approximately 75% of SiteMinder’s subscription base is small and medium-sized businesses, generating approximately 71% of FY21 subscription revenue.
Is SiteMinder a Good Investment – Sentiment
You may ask yourself, what do other investors think of SiteMinder shares? After surveying 117 Investors about their current SDR shares sentiment: BUY-HOLD SELL, as well as their target price over the next 12-months here are the results;
The results from this survey show there seems to be a strong bullish investor sentiment on SDR shares. So let’s take a look to see Is Siteminder a Good Investment?
What was the SiteMinder IPO Price? SiteMinder’s IPO issue price of $5.06 per ordinary share and an enterprise valuation of $1.3bn on the listing. However, shares closed up a large 37% on their first day to $7.10.
When did SiteMinder IPO? SiteMinder (SDR:ASX) IPO’d on the ASX on Monday the 8th November 2022 under the ticker code SDR.ASX
A copy of the SiteMinder Prospectus can be found here.
SiteMinder Shares Price
At the time of writing SiteMinder shares have a price of $6.92, which is slightly down from their IPO high of $7.10! This give’s the company a current market capitalisation of $1.86billion.
The company whilst recently listing has a 52-week range of $6.50 – $7.77 per share, meaning that the shares are currently trading towards the middle of the range since going public.
SiteMinder Shares Fundamentals
SiteMinder is yet to turn earnings positive and hence does not yet have a P/E ratio, the company is also currently EPS negative.
After listing the company will have over $121million of cash and equivalents on their balance sheet, which makes up just under 7% of the market cap. This is inline with other companies of a similar size and nature.
The groups gross margin is large at over 70%, however this is not quite as high as one of our portfolio companies Ansarada which has over 90% Gross Margins.
|Current Share Price||$6.92|
|Shares on Issue||269,359,801|
|ASX Rank||218 of 2,324|
|Price / Sales||18x|
|Price / Earnings||N/A|
|NTA Per Share||n/a|
|Cash and Equivalents||$174.2m |
SiteMinder Shares Financials
In FY21, the company generated 83.3% of their pro forma total revenue from recurring subscription fees and 16.6% through transaction fees from subscriber properties.
Interestingly data provided in the prospectus indicated that global travel bookings would be unlikely to return to pre-covid levels until at least 2024.
SiteMinder Shares Income Statement
The group in their prospectus documentation provided a historical look into their financials. The group had typically been increasing revenue at a rate of 30% year on year, however, since the end of 2019, the group has been impacted by the COVID pandemic.
Interestingly the group still increased revenue by 11.4% into FY20, however, this is likely due to the nature of the subscriptions which some seemed to have churned into FY21. Despite the difficult conditions, this seems to be a good result in comparison to some other companies in the wider travel sector.
As part of the prospectus, the company also provided a summary of their historical results and Pro-Forma results. The financial year FY21 SiteMinder reported $100.8million of revenue, with a bottom-line loss after tax of $121.8m or a Pro Forma loss after-tax expense of $27.8m.
The group spends a significant portion of their top line on sales and marketing expenses, which historically has been around 35-40 percent of revenues or about 50% of OPEX. Potentially sales and marketing efforts may not have to be maintained significantly high as the group capture more of the market and have repeat business from existing clients.
The group list in their prospectus that the average revenue per user is increasing from around $244 in FY19 to $265 in Q4 21. This suggests that existing users may be utilizing additional services provided by the platform.
SiteMinder Shares Insiders and Ownership
The company’s shares are predominantly owned by the general public with over 62% ownership. This is closely followed by institutions such as Blackrock and Bailador with over 18%.
The Individual Insider ownership stake is decently high for an ASX listed company of this size. Chief Executive Officer Mike Ford owns around 4% of the company, we like to see CEO’s who hold a decent amount of shares.
SiteMinder Recent Insider Transactions
Whilst there haven't been any on-market insider transactions recently it is worth taking a look into the SiteMinder IPO prospectus to see if there were any substantial sell downs as part of the IPO process.
From the above, CEO Micael Ford reduced his ownership allocation from 11% down to 4.6% upon IPO. Bellite, an entity controlled by Leslie Szekely has reduced its stake from 12.5% down to 5.7% and TCV seems to have excited the company completely at IPO. This is somewhat typical for VC firms.
SiteMinder Top 5 Shareholders
The top 5 shareholders consist of some reputable names such as Bailador Technologies, VC and Angel Investor Leslie Szekely and Ellerston Capital.
Notable company executives Mike Ford the CEO and Mike Rogers (Chairman) also seem to be heavily incentivised by holding over $100million shares at the current price.
|6.2%||Bailador Technology Investments Ltd.||16,700,000||$115.6m|
|6.05%||AustralianSuper Pty. Ltd.||16,300,000||$112.8m|
|5.27%||Ellerston Capital Limited||14,200,000||$98.3m|
|4.62%||Mike Ford (CEO)||12,453,770||$86.2m|
|0.85%||Mike Rogers (Exec)||2,300,000||$15.9m|
SDR ASX - Prophets Take
Personally, we prefer the behemoth in the room with US-Listed Airbnb. However, if you were potentially wanting to get some travel exposure on the ASX SiteMinder might be able to provide this!
We will be sitting on the sidelines for this one, monitoring for the below KPI's. Once the company achieves these we may look further into SiteMinder.
- Improving top line growth
- Improving EBITDA margin and potential profitability turning point
- Reduction of company long term debt
- Reducing sales and marketing expenses as a proportion of revenue
- Increasing client numbers and ARPU
The group has a decent gross margin at over 70%, however sales and marketing expenses seem to be substantially high. Overtime the company may be able to reduce the S&M expense as more clients continue with repeat business in the platform.
A large takeaway from the prospectus was that even through the pandemic which caused a near shutdown on accommodation, the hotel providers didn't seem to be rushing to cancel subscriptions. This may indicate that the product is a vital tool for many SMB hotels which to conduct operations. If this is the case, there may be some potential upside, I suppose the next few quarters will provide an indication.