Nice write up - very interesting case! Some questions on valuation: How has the valuation multiple changed since the SaaSpocalypse trend ? What does the ~13x fwd PE multiple look like relative to other similar companies ? Do you believe this reflects a trough multiple?
They are technically not a SaaS company but the same AI risks obviously apply. I think the consensus losers like pure call center stocks (concentrix, teleperformance) which operate at half the margin are trading around 5x P/E but they are still growing so the AI impact has not been dramatic as of yet. This is probably a worst case scenario for IT services. I think as I outlined, decentralized boutiques are well positioned to defend themselves but the base case is a continuation of IT services demand as companies need help cleaning up their data, upgrading systems, designing processes, perhaps training internal models which is where IT Services companies like Spyrosoft come-in. Syprosoft hasn’t been caught-up in the IT services sell down as much as say your Globant’s or EPAM’s or Accenture’s owing to their reltaively small size and just overall lack of interest and lower starting valuation so its been less of a factor to the stock price
Nice write up - very interesting case! Some questions on valuation: How has the valuation multiple changed since the SaaSpocalypse trend ? What does the ~13x fwd PE multiple look like relative to other similar companies ? Do you believe this reflects a trough multiple?
They are technically not a SaaS company but the same AI risks obviously apply. I think the consensus losers like pure call center stocks (concentrix, teleperformance) which operate at half the margin are trading around 5x P/E but they are still growing so the AI impact has not been dramatic as of yet. This is probably a worst case scenario for IT services. I think as I outlined, decentralized boutiques are well positioned to defend themselves but the base case is a continuation of IT services demand as companies need help cleaning up their data, upgrading systems, designing processes, perhaps training internal models which is where IT Services companies like Spyrosoft come-in. Syprosoft hasn’t been caught-up in the IT services sell down as much as say your Globant’s or EPAM’s or Accenture’s owing to their reltaively small size and just overall lack of interest and lower starting valuation so its been less of a factor to the stock price