The cloud software stocks on our list trade at less than the industry-average EV/Sales multiple
SmallCapPower | December 6, 2017: According to Gartner Research, Public Cloud Services are estimated to become a $411 billion market, growing at a robust 17% CAGR between 2017 and 2020. The small-cap cloud software stocks on our list provide a variety of cloud-based software solutions and the majority trade well below the industry average EV/Sales (FY2018) multiple of 8.7x.
Redknee Solutions Inc. (TSX:RKN) – $1.02
IT Services & Consulting
Redknee Solutions provides a variety of software solutions, primarily to global telecom industry clients. The Company provides its solutions on site, on the cloud or as Software-as-a-Service (SaaS). RKN’s services include billing, charging, customer care, network management, and data analytics for ~250 clients.
- Market Cap: $267 Million
- Month over Month Return: -3.8%
- Forward Enterprise Value to Sales (FY18): 2.0x
Carl Data Solutions Inc. (CSE:CRL) – $0.47
Carl Data Solutions is a Canada-based company focusing on the next generation of data collection, storage, monitoring and analytic solutions for data-centric enterprises. The Company develops cloud-based software analytics and dashboard solutions to provide Big Data as a Service (BDaaS) solutions for industry and governments. Carl Data’s applications can collect any type of data from any sensor or source to produce detailed reports, predictive analytics, and real-time insights into infrastructure status. Carl Data’s current industry focus is water and wastewater infrastructure, and is expanding into power, mining, and the Oil & Gas industry.
- Market Cap: $19 Million
- Month over Month Return: 55.0%
- Forward Enterprise Value to Sales (FY18): 4.5x
Enghouse Systems Ltd. (TSX:ENGH) – $55.50
Founded in 1984, Enghouse Systems Limited develops enterprise software solutions for a variety of industry sectors. Currently, the Company remains focused on acquisitions to diversify its software offerings. The Company operates through three segments: Enghouse Interactive, Enghouse Networks and Enghouse Transportation. The Interactive segment offers communications software and services primarily for client customer service operations. The Networks segment offers solutions for planning, design, operations, and support of telecommunications and utility networks. Lastly, the transportation segment offers solutions such as route scheduling, driver time keeping and uses data analytics for a variety of real time applications.
- Market Cap: $1,497 Million
- Month over Month Return: 3.3%
- Forward Enterprise Value to Sales (FY18): 5.9x
Real Matters Inc. (TSX:REAL) – $9.04
Real Matters is a Canada-based technology company whose platform serves as a marketplace for mortgage lending and insurance related services. Field agents such as real estate appraisers, are able to compete on Real Matter’s platform, which provides users with transparency and efficiency. The Company’s Canadian platform, Solidifi is utilized by five of the top seven Canadian banks and has a network of 3000+ appraisers.
- Market Cap: $792 Million
- Month over Month Return: -5.9%
- Forward Enterprise Value to Sales (FY18): 5.5x
Kinaxis Inc. (TSX:KXS) – $72.48
Kinaxis provides cloud-based subscription software for supply chain operations. The Company’s RapidResponse software, connects data, processes and users onto a single platform, giving a consolidated view of the client’s entire supply chain. As a result, the software allows users to monitor progress in real time, improving operational performance.
- Market Cap: $1,844 Million
- Month over Month Return: 0.0%
- Forward Enterprise Value to Sales (FY18): 11x
Disclosure: Neither the author nor any of the principals at SmallCapPower, or their family members, own units in any of the companies mentioned above.
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