Why I believe this European SaaS company can deliver 17%+ annual returns from here.
Scaling organically with high margins, delivering 20%+ ROIC and trading at an attractive valuation. Plus special 20% discount inside for the next 3 subs.
Hey there,
Today, I’m looking at a high-quality European small-cap Saas company that IPOed a few years ago. The company is scaling profitably with high margins and without the usual downside that SaaS companies have. Founders are still involved with the company and own over 60% of shares outstanding and executive management owns another 5% of shares. Let’s take a closer look.
Why is it interesting now?
SaaS companies have seen rising popularity since the pandemic because of the fast and predictable growth, but they come with downsides, especially American SaaS companies:
❌High dilution and inflated FCF margins through stock-based compensation.
❌Very high investment requirements in Sales and Marketing (S&M) to offset high churn rates.
❌SaaS that isn’t mission-critical is often easy to replace and comes with strong pricing competition.
❌Long sales cycles require good customer retention, which many SaaS don’t have.
This company is different. And now is the perfect time to look closer.
A Proven, Profitable Growth Engine
This is mission-critical enterprise software with deep customer lock-in:
✅ 2/3 of growth comes from existing accounts, via up-selling and cross-selling
✅ Recurring revenue makes up ~90% of total sales
✅ They’ve already achieved ROIC > 20%, with significant room to scale further
✅ Organic growth focus—no empire-building M&A spree
✅ Clean balance sheet with net cash and high cash conversion
Here are some key stats:
📈 AEBITDA margin: >35%
📈 AEBITDA to FCF conversion: >80%
📈 Net Revenue Retention: >120%
📉 Churn: <2.5%
📈 5-year revenue CAGR: 19%
📉 Net Cash Balance Sheet
👥 ~69% insider ownership, with founders still involved on the board
And despite this quality, it trades at just 20x forward EBITDA, with 15-20% annual profit growth potential. Let’s dive into this pitch!
What’s next?—Special discount for the next 3 annual subs
The full premium pitch covers the following:
🔍 How the company makes money
⚙️ What drives scalable, capital-efficient growth
⚠️ The key risks to watch
📈 How they can deliver a 17%+ IRR from here
For the next 3 annual subscribers, I’m offering an exclusive 20% discount on premium membership that lasts forever. This deal is only valid until the end of the month, and once the spots are gone, they’re gone.
🔥 I recently made my deep dive into Ashtead Group free—so you can see exactly what to expect: Business model deep dive - Fundamentals and Valuation deep dive
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