Asure Software Inc: Shares Up 40% in 2019, Additional 115% Upside

Asure Software Inc Momentum and Record Results Point to 115% Gains
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Asure Software Inc Share Price Set to More Than Double

Investors ran for cover back in November when Asure Software Inc (NASDAQ:ASUR) announced mixed third-quarter financial results, notably increased net loss, and the company revised its full-year guidance lower.

Since the start of 2019 though, Asure Software stock has had great momentum, climbing 40% year-to-date, far outpacing the S&P 500, which is up 17% in 2019, and the Nasdaq, which is up 20%.

There is reason to be bullish on ASUR stock. In mid-March, the company reported record fourth-quarter revenue and in May, it announced record first-quarter financial results.

This optimism helped Asure mostly avoid the tech stock sell-off in May. At the same time, the company’s share price has enjoyed the broad-based boost that resulted from President Donald Trump’s trade deal with Mexico.

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Asure Software stock is currently changing hands for around $6.90. While it still needs to climb more than 55% to get to its pre-sell-off level in November, that seems a little conservative. A more bullish projection would see Asure’s share price climbing about 115% to a tested resistance level near $15.00.

Asure Software Inc Overview

Asure Software is a cloud computing firm that provides human capital management (HCM) and workplace management software solutions to over 100,000 clients worldwide. (Source: “About Us,” Asure Software Inc, last accessed June 10, 2019.)

The company’s products include an HCM platform, benefits and compliance administration, human resource consulting, and time and labor management. (Source: “Products,” Asure Software Inc, last accessed June 10, 2019.)

Asure’s “NowSpace” is a mobile app that allows on-the-go employees to find and reserve desks and conference rooms from their smart phones. The company’s time and attendance software automates the collection and calculation of payroll, develops staff schedules, and accounts for overtime—all of which should reduce overhead.

ASUR Stock Information
Market Cap $106.1 Million
52-Week High $18.63
52-Week Low $4.26
Shares Outstanding 15.4 Million
Float 10.9 Million
50-Day Moving Average $6.78
200-Day Moving Average $6.15

(Source: “Asure Software, Inc. (ASUR),” Yahoo! Finance, last accessed June 3, 2019.)

Record First-Quarter Results

On May 9, Asure Software Inc announced record financial results for the first quarter ended March 31, 2019. First-quarter revenue was up 39% year-over-year at $26.8 million. (Source: “Asure Software Announces Record First Quarter 2019 Results,” Asure Software Inc, May 9, 2019.)

Recurring revenue accounted for 88% of total revenue. Hardware, professional services, and “other” made up the rest.

Asure reported a net loss of $2.9 million ($0.19 per share), compared to a loss of $1.9 million ($0.15 per share) in the same prior-year period.

Non-generally accepted accounting principles (GAAP) earnings per share came in at $3.3 million ($0.22 per share), a 109% increase over the $1.6 million ($0.13 per share) in the first quarter of 2018.

“We kicked off 2019 with solid momentum and are keenly focused on accelerating the velocity of our cross-selling opportunities and scaling our business,” said Pat Goepel, CEO.

Goepel added, “Our focus this year continues to be the harmonization of recent acquisitions, margin improvement, realization of better cash generation and investment in product innovation and continued execution on our cross-selling initiatives.”

Looking forward, management reiterated its guidance for 2019, with revenue in a range of between $104.0 and $107.0 million. At the mid-point, that represents an 18.5% increase over the $89.0 million the company recorded in 2018.

Non-GAAP earnings before interest, tax, depreciation, and amortization (EBITDA) is projected to be in a range of $23.0 to $25.0 million. At the mid-point, that’s a 21.2% increase over the $19.9 million non-GAAP EBITDA recorded in 2018.

Asure Software Inc also expects to report positive cash flow from operations in fiscal 2019.

Analyst Take

After a tough 2018, Asure Software stock has turned around. The company reported record fourth-quarter and record first-quarter financial results. Going forward, full-year revenue and adjusted earnings are both expected to increase.

Asure Software Inc continues to have great momentum, and over the coming quarters, its share price could more than double to $15.00.