Hi David,
Software company SiteMinder (SDR) provides cloud-based technology for hotels to manage online distribution, bookings, and pricing. In short, it’s a software-as-a-service (SaaS) business whose platform acts as a central hub connecting hotels to online travel agencies (OTAs), global distribution systems, and direct booking channels, helping properties sell rooms more efficiently and maximise occupancy.
- It’s not really a “small cap” with a market cap of $1.9bn, after its recent 15% pullback, but as you say it’s not yet profitable having lost $24.67mn in FY25.
This is a true growth story in every sense of the word, with the company enjoying Annualised Recurring Revenue (ARR) of $273mn up ~30% YoY. While they’re still investing for growth, the shape of the P&L continues to improve as scale benefits start to come through in gross margin and customer acquisition efficiency. SDR is targeting ~30 % organic annual revenue growth in the medium term, aided by international expansion, increasing penetration of larger hotel properties, and growing lifetime value from its existing customer base.
From here SDR is aiming to accelerate growth, shift its revenue mix toward higher‑margin flows, and achieve scalable, profitable operations as it executes its Smart Platform rollout with positive overseas penetration likely to see the stock re-rated on the upside.
- We continue to believe SDR offers one of the better visible-growth tech names on the ASX and we hold the stock in our Emerging Companies Portfolio.
After a strong run, SDR has been sliding lower in line with weakness across the ASX tech space but from a risk/reward perspective it looks good under $8. Continued execution is the key for SDR as they transition into a profitable business. It’s now also on the radar of “Shawns Trading Ideas”, perhaps that will give you some insight from a timing perspective of when to press the button.
