AlphaValue Corporate Services Fundamental Analysis FR
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AlphaValue Corporate Services
This research has been commissioned and paid for by the company and is deemed to constitute an acceptable minor non-monetary benefit as defined in MiFID II

Prodware

CR
Bloomberg   ALPRO FP
Application Software  /  France  Web Site   |   Investors Relation
Transformation to SaaS
Pros
  • Prodware's business development is based on Microsoft software, essentially. Prodware benefits from its demanding ‘Microsoft Gold Certified partner’ status and is a member of the Microsoft Dynamics Inner Circle
  • The differentiation between Prodware and most traditional software vendors lies in the editing of specific solutions dedicated to a selective number of sectors (retail, manufacturing, professional services, financial services)
  • Prodware is involved in a business transformation to SaaS with the expansion of Microsoft Dynamics 365 online. The advantage of SaaS is higher recurring and predictable revenue in the future
Cons
  • The switch of software licences to software subscriptions revenue and the need of investments in the business weigh on both growth and margin over the transformation phase
  • The SaaS model could facilitate the emergence of new small-sized and agile competitors and, consequently, force price pressure and lower margins for traditional software editors and their vendors
  • Restated from the significant impact of the research tax credits, net of fees (€+10.7m in 2017), the group posts a low operating margin (<5% of revenue)
Target
Upside 128%
Price (€) 5.6
Market Cap (€M) 43.3
Perf. 1W: 1.82%
Perf. 1M: -9.97%
Perf. 3M: -0.88%
Perf Ytd: -38.1%
10 day relative perf. to stoxx600: -0.20%
20 day relative perf. to stoxx600: -7.58%