SDR bounced +4% on Thursday, but its ~5% revenue miss in February is still weighing on the stock, which remains over 30% below its late 2024 high. This $1.3 billion company is a high-growth stock that generates over $200 million in annual recurring revenue, although it still incurred approximately $14 million in losses in 1H25. However, the company expects to be underlying EBITDA and free cash flow positive in FY25; hence, this is the time to be buying the dip for the future.
- We like SDR as a business, but it needs to provide the market with a reason to re-rate it higher in the short-term unless the market regains its bullish mood and undergoes a period of general valuation expansion. We hold SDR in our Emerging Companies Portfolio.
MM is cautiously bullish toward SDR
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