SiteMinder (SDR) - Ducks lined up and ready to quack

SiteMinder provides online booking and management software for hotel operators and travel groups, with customers across Asia Pacific, Europe, the Middle East, Africa, and the Americas. The company was incorporated in 2006 and is headquartered in Sydney.

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The SiteMinder investor day led Ord Minnett to reiterate its view that the current share price reflects a ‘ground zero’ view of the future. In other words, the market is attributing little or no value to the potential upside from the Channels Plus (C+) and Dynamic Revenue Plus (DRP) products. We consider this approach unwise given the weight of industry feedback we have received over the last 18 months. In the interests of conservatism, we have adopted a long-term discounted cash flow valuation approach when it comes to deriving our 12-month target price of $7.97 for SiteMinder. This is likely to understate share price upside should the company deliver against both OML and consensus revenue forecasts for FY26 and FY27. Using a one-year forward enterprise value to revenue ratio methodology, the share price could appreciate to $9–10 over the next 1-2 years.

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At the investor day, SiteMinder was eager to show the advantages of having an all-in-one platform that streamlines otherwise quite cumbersome (and often archaic) processes for hotels in managing different rooms and rates across online travel agents (OTAs). Our industry feedback is that C+ has the potential to materially disrupt the hotel distribution food chain over the medium term. For some time, our industry feedback has been that DRP could be a transformational product for SiteMinder. The key pushback is whether the company can sell this cost effectively, along with a host of other products, at scale? The go-to-market strategy outlined at the investor day provided comfort that this challenge is being addressed, however it may take time to measure success.

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Our earnings estimates are unchanged given SiteMinder reiterated previous guidance. We maintain our Buy recommendation.