Asure Software Stock to Benefit From Strong Management-Software Growth
Shares of Asure Software Inc (NASDAQ:ASUR) have been on a solid growth trajectory since being kicked off a cliff in April 2020.
As of this writing, ASUR stock is up by:
- 18% over the last three months
- 32% year-to-date
- 45% year-over-year
- 93% since bottoming in April 2020
While COVID-19 continues to impact the company’s revenue growth, its focus on small and mid-sized businesses is helping reverse that trend. Moreover, the gradually improving unemployment rates and the push to have employees return to their offices should serve as an economic tailwind.
As a result, Asure Software Inc is looking to generate positive organic revenue growth in 2021. It’s targeting 10% organic and 10% acquired revenue growth.
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ASUR Stock Overview
Asure Software is a cloud computing company that provides human capital management (HCM) software to more than 80,000 companies around the world. (Source: “Investor Presentation: May 2021,” Asure Software Inc, last accessed August 3, 2021.)
The company’s offerings include “Asure Payroll & Tax,” an integrated cloud-based solution that automates processes associated with payroll and taxes, including wages, benefits, overtime, garnishments, tips, and direct deposits.
The company also provides human resources (HR) services, including an online compliance library and an on-demand call center for various HR questions.
“Encouraging” Q1 Results
For the first quarter of fiscal 2021, ended March 31, Asure announced that its total revenue increased by 4.5% year-over-year and 20.5% sequentially to $19.8 million. (Source: “Asure Announces First Quarter 2021 Results,” Asure Software Inc, May 10, 2021.)
The first-quarter revenue mix primarily comprised recurring revenue (97%), with professional services, hardware, and other revenue representing the remaining three percent.
The company’s gross profit was $12.5 million (63.1% margin), up from $11.1 million (58.6% margin) in the same prior-year period. Its adjusted gross profit was $13.7 million (69.0% margin), up from $12.1 million (64.1% margin) in the first quarter of 2020.
Asure Software Inc reported a first-quarter net loss of $1.5 million, or $0.08 per share. That was an improvement over the first-quarter 2020 net loss of $1.7 million, or $0.11 per share.
The company reported adjusted net income of $2.2 million, or $0.12 per share, up from an adjusted loss of $69,000 or breakeven per share, in the fourth quarter of 2020.
Asure Software Inc’s earnings before interest, taxes, depreciation, and amortization (EBITDA) were $2.6 million, up from a first-quarter 2020 EBITDA loss of $1.5 million.
During the quarter, the company’s small-business bookings increased by more than 90% year-over-year and its total bookings increased by more than 20% year-over-year.
Asure Software Inc’s chairman and CEO, Pat Goepel, commented, “Although the COVID-19 pandemic continues to impact our top line, our focus on helping small and mid-sized businesses grow is paying off, driving first quarter revenue up 20.5% sequentially…”
We are cautiously optimistic that momentum with our business will continue as economic conditions improve. Furthermore, visibility into our business outlook has improved to a point where we are comfortable reintroducing quarterly guidance. Our strategy has not changed, and we are still striving to generate 10% organic and 10% acquired revenue growth.
What a difference a year can make for Asure Software stock.
The company reported encouraging first-quarter 2021 improvements and reiterated its quarterly guidance for revenue growth.
Asure Software Inc is set to capitalize on the global integrated workplace-management market, which is expected to expand at a compound annual growth rate (CAGR) of 12% between 2021 and 2026. That bodes well for ASUR stock investors.