KXS has been slowly moving towards its yearly low. Can you provide a quick assessment as to strengths, weaknesses and what you see going forward? Are there any threats/risks that might arise and is it still one of your top picks?
In the recent quarter, revenue grew 25%, annual recurring revenue was up 22% and adjusted EBITDA margin improved to 14% from 13% last year. The company continues to show solid execution with strong organic growth, and the Saas business model is starting to generate meaningful cash flow and profitability, and strong switching costs for customers. We still like the name, and we think the recent drop may provide investors opportunity to average into the position. Since KXS never issues new shares (it has lots of cash) it does not get much broker attention and thus can sometimes 'drift' lower. (5iResearch)