RDY's price down ~10% this morning simply because the company has turned down a take over offer for $4.50 p/s.

Currently trading at ~$3.15. I've seen this as an opportunity and have been buying this morning.

News Summary

DJ Readytech Ready to Narrow Big Discount to Peers -- Market Talk

RDY$1.63

$0.00 (0.0%)$1.68$1.715

26 Mar 2021 08:55:24

2 Views

2155 GMT - Software-as-a-service provider Readytech is trading at a 40%-45% discount to its closest peers, which looks unwarranted to Shaw & Partners. The investment bank starts coverage of Readytech at buy with a A$3/share price target, well above the stock's closing price of A$1.63 yesterday. Shaw believes Readytech's valuation appears anchored by historical markers, rather than its fundamentals. "When we compare Readytech's revenue growth and cash margin, to its closest software peer group, it is similar, if not better," Shaw says. "As such, with Readytech trading at 40-45% discount to this group, we believe the market is not fully valuing its attractive blend of software attributes." (david.winning@wsj.com; @dwinningWSJ)

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Another opportunity (in my opinion) to pick up a slice of RDY at a significant discount although it could trade sideways until either further aquisitions are announced, a trading update or until full year results in August which should then re-rate the stock.

For those interested Macquarie posted the following:

COMMENTARY

ReadyTech's earnings beat the broker by 5%, featuring strong growoth in both Education and Workforce Solutions. While revenues grew 13% year on year, earnings were flat due to further investment in marketing and sales roles. Full year guidance is unchanged.

With a "decent" growth outlook, ReadyTech's 19x forward PE is undemanding, the broker suggests, and the stock should re-rate as it continues to execute against its growth strategy, including winning larger value clients. Outperform retained.

Target falls to $2.75 from $2.85 on enterprise valuation.

FORECAST
Macquarie forecasts a full year FY21 dividend of 2.30 cents and EPS of 10.00 cents.
Macquarie forecasts a full year FY22 dividend of 5.80 cents and EPS of 12.60 cents.

Only recently listed ReadyTech is a leading SaaS provider of mission-critical people management systems to help customers meet compliance obligations, efficiently manage people through software and drive key performance outcomes.

Forecast 14.4% revenue growth from CY18 to CY19F to deliver $35.1m revenue and $14.6m EBITDA
Highly cash generative SaaS-focussed business with strong EBITDA margins and FY16 to CY19F 
EBITDA CAGR of 29%

95% revenue retention rate with a strong pipeline of greater than $15 million in gross annual revenue.
ReadyTech is expected to grow organic revenue at 12% CAGR from FY16 to CY19F and increase the percentage of subscription and licence revenue from 85% in FY16 to 91% in CY19F

Remains a high risk opportunity but IMO an opportunity nonetheless. Strong need to keep an eye out for any announcements regarding performance and/or outlook.