Key Metrics
~4x earnings
~3x EV/EBIT
90%+ recurring revenue
Share count down 25% in 3 years
Buffett likes good businesses.
Munger did too.
And so do I.
Especially when they are available at a cheap price.
That doesn’t happen very often, but when it does, I pay attention.
Today’s stock is exactly that.
The business needs almost no capital to run, more than 90% of its revenue is recurring, and it is deeply embedded in how its customers work, which makes switching hard.
And the multiples really speak for themselves.
The stock trades at ~4x earnings and 3x EV/EBIT.
On top of that, management has been buying back shares again and again over the past years. In total, the share count went down by 25% in three years.
Let’s take a closer look at this business.