One of the reasons we like IRE, it has a near lock on wealth management software domestically (Xplan, which every reader of this blog has likely interacted with), has international optionality, but mostly, because it is capex light and produces tremendous free cashflow.
The buyback program continues, and guidance remains intact, albeit modestly towards the lower end of the guided range (on an underlying NPAT basis, is for 25% growth on pcp).
Based on our implied earnings trajectory calculations, IRE is tracking well to the aspirational growth targets (2025) and has what appears to be a reasonable hurdle rate to generate a total return of 7.5% annually. Broker estimates could come down a touch, and it should still get there.
Churn rates across products remains towards the lower end of recent history.
We remain happy holders in our direct equity portfolios, with IRE our anchor “tech” exposure, and provides a solid quality factor loading, on both the classic Fama french factors, below…
…and that of style benchmarks.
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Please note that past performance is not a reliable indicator of future performance.
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