TIE Kinetix is focused on 100% digitalisation of document streams in the supply chain. FY22 will be a transformative year as it is heavily investing in accelerating growth and improving margins in the next few years. While this will put short-term pressure on profitability, the company has set targets to accelerate organic growth in software-as-a-service (SaaS) revenues to more than 20% per year by FY25, with an EBITDA margin of up to 20%. Now fully focused on SaaS, recurring revenues are expected to increase from more than 80% to more than 90% over the next few years, further improving the predictability of its results.

TIE Kinetix is entirely focused on SaaS solutions, which should increase predictable recurring revenues over the next few years and in turn underpin its valuation. The company is trading on EV/sales of 1.9x in FY22e compared to an average of 3.1x for European peers and 9.2x for US peers. Our DCF points to a fair value of €26 per share, ie 36% upside to the current share price. 

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