London, UK, 21 September 2021

Esker (ALESK): Returning to pre-COVID-19 growth path

Esker's H121 results confirm growth has accelerated after a period of COVID-19-induced weaker demand in FY20. Revenue growth of 19% y-o-y compares to 8% growth in H120 and FY20. Despite increasing headcount by 12% y-o-y, Esker reported operating profit growth of 47% and an operating margin at the higher end of the company's 13-15% target range. While FY21 guidance is unchanged, our earnings forecasts for FY21/22 have been revised to reflect the pace of cost increases and wage inflation.

The stock trades at a premium to document processing automation software and French software peers but at a discount to US SaaS peers. Esker has re-rated over the past two years (the stock is up 109% over the last year and 259% over two years), with its P/E multiple moving much closer to the US SaaS software peer group. We believe this is due to the value placed on businesses with high levels of recurring revenue, providing visibility through a period of economic uncertainty, and the potential for multi-year profitable double-digit growth. Esker has the added advantage of a strong balance sheet to fund growth.

Click here to view the full report or here to sign up to receive research as it is published.

All reports published by Edison are available to download free of charge from its website

www.edisongroup.com

About Edison: Edison is a leading research and investor relations consultancy, connecting listed companies to the widest pool of global investors. By focusing on the volume and quality of investors reached - across institutions, family offices, wealth managers and retail investors - Edison can create and gauge intent to purchase, even in the darkest pools of capital, and then make introductions via non-deal roadshows, events or virtual meetings.

Having been the first in-market 17 years ago, Edison now has more than 100 analysts covering every economic sector. Headquartered in London, Edison also has offices in New York, Frankfurt, Amsterdam and Tel Aviv and a presence in Athens, Johannesburg and Sydney.

Edison is authorised and regulated by the Financial Conduct Authority.

Edison is not an adviser or broker-dealer and does not provide investment advice. Edison's reports are not solicitations to buy or sell any securities.

For more information, please contact Edison:

Katherine Thompson +44 (0)20 3077 5730 tech@edisongroup.com

Learn more at www.edisongroup.com and connect with Edison on: 

LinkedIn        www.linkedin.com/company/edison-group-/

Twitter           www.twitter.com/Edison_Inv_Res

YouTube       www.youtube.com/edisonitv