The numbers tell that Rapidcloud Intl is a solid growth stock
10 Jun 2015 • About Rapidcloud Intl (
$RCI) • By InTwits
Have you thought about Rapidcloud Intl as a growth stock? It showed noticeble revenue performance in the last years among with attractive profitability and financial model.
Growth story
Rapidcloud Intl showed growth in the last financial year. Rapidcloud Intl's revenue surged on 57.1% in FY2014. EBITDA also increased: -14.5% for the same period.
In the longer period Rapidcloud Intl showed fast revenue growth of 30.3% from FY2011 to FY2014 annually. EBITDA surged on 9.91% from FY2011 to FY2014 annually.
Rapidcloud Intl ($RCI) financials for the last 5 years
| mln. MYR | FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Revenue | 6 | 8 | 9 | 11 | 18 |
|---|
| Revenue growth, % | | 34.2% | 16.4% | 20.9% | 57.1% |
|---|
| Gross margin, % | 54.1% | 61.9% | 68.0% | 74.6% | 54.3% |
|---|
| SG&A, % | | | | | 42.4% |
|---|
| EBITDA | 1 | 4 | 4 | 6 | 5 |
|---|
| EBITDA growth, % | | 339.0% | 13.0% | 37.3% | -14.5% |
|---|
| EBITDA margin, % | 14.5% | 47.4% | 46.0% | 52.3% | 28.5% |
|---|
| Net Income | 0 | 3 | 4 | 3 | 4 |
|---|
| Net Income margin, % | 5.44% | 37.9% | 39.0% | 22.3% | 20.6% |
|---|
| |
| CAPEX | 0 | 0 | 0 | 3 | 2 |
|---|
| CAPEX/Revenue, % | 2.18% | 0.695% | 0.970% | 23.1% | 11.6% |
|---|
| Debt | 0 | 0 | 0 | 1 | 1 |
|---|
| Cash | 1 | 3 | 3 | 6 | 4 |
|---|
| Net Debt/EBITDA | -0.7x | -0.7x | -0.6x | -0.9x | -0.7x |
|---|
| |
| ROIC, % | | 78.8% | 54.1% | 35.5% | 14.9% |
|---|
| ROE, % | | 79.2% | 56.6% | 19.2% | 16.4% |
|---|
Profitability and return on investment
EBITDA growth was partly attributed to margin expansion. In the longer period EBITDA margin dropped on 18.9 pp from 47.4% in FY2011 to 28.5% in FY2014.
Rapidcloud Intl shows attractive ROIC at 14.9% for the last 12 months which assumes stable development model. Three years ago it was considerably higher at 78.8%. For the last three years the average ROIC was 34.8%.
Net Income margin decreased on 1.70 pp from 22.3% to 20.6% in FY2014. If we look for the longer period the company's Net Income margin dropped on 17.3 pp from 37.9% in FY2011 to 20.6% in FY2014.
Rapidcloud Intl operates at ROE of 16.4%. It's average level of ROE for the last three years was 30.7%.
Capital expenditures (CAPEX)
To fuel this fast growth Rapidcloud Intl had to invest in CAPEX.Rapidcloud Intl's CAPEX/Revenue was 11.6% in FY2014. The company showed fast CAPEX/Revenue growth of 10.9 pp from 0.695% in FY2011 to 11.6% in FY2014. Average CAPEX/Revenue for the last three years was 11.9%.
Leverage (Debt)
The company has negative net debt at -0.7x Net Debt/EBITDA - at the same time with high growth. In the last 3 years the company showed fast leverage growth of 0.03x from -0.70x in FY2011 to -0.67x in FY2014.
Valuation vs. comparable companies
The market closed today at 0.9x EV/EBITDA for Rapidcloud Intl which is 94.5% lower than 16.0x Software & Computer Services peer group avearge calculated on the basis of 126 companies. The company trades at 2.1x P/E which is 96% lower than 53.2x Software & Computer Services industry avearge calculated based on 13 companies.
For capital intensive compnanies it's worth taking a look at EV/(EBITDA-CAPEX) multiple. The market closed today at 1.5x EV/(EBITDA-CAPEX) for Rapidcloud Intl which is higher vs. -0.4x Software & Computer Services peer group avearge calculated on the basis of 15 companies.
Peers in Software & Computer Services
Below you can find Rapidcloud Intl benchmarking vs. other companies in Software & Computer Services industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Coms ($COMS) | | 8.4% | -68.6% | 46.8% | 763.3% |
| Centralnic Group ($CNIC) | | 36.3% | 15.9% | 4.0% | 98.9% |
| Netdimensions(Hldgs)Ltd ($NETD) | | 48.5% | 12.5% | 17.5% | 40.1% |
| Wandisco ($WAND) | | 30.0% | 55.5% | 32.8% | 40.0% |
| Ubisense Group ($UBI) | | 34.4% | 2.1% | 11.2% | 29.8% |
| |
|---|
| Median (35 companies) | | 3.1% | 5.9% | 5.3% | -0.0% |
|---|
| Rapidcloud Intl ($RCI) | | 34.2% | 16.4% | 20.9% | 57.1% |
Top companies by Gross margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Lombard Risk Management ($LRM) | | 99.3% | 99.0% | 98.8% | 99.2% |
| Phoenix It Group ($PNX) | 97.4% | 97.1% | 97.0% | 97.2% | 97.6% |
| Netcall ($NET) | 91.3% | 86.9% | 88.2% | 89.7% | 91.0% |
| Eleco ($ELCO) | 37.0% | 70.3% | 86.8% | 86.6% | 87.8% |
| Sanderson Group ($SND) | 69.0% | 82.3% | 83.6% | 87.6% | 84.9% |
| |
|---|
| Median (31 companies) | 55.8% | 55.9% | 59.1% | 62.0% | 58.9% |
|---|
| Rapidcloud Intl ($RCI) | 54.1% | 61.9% | 68.0% | 74.6% | 54.3% |
Top companies by EBITDA margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Eservglobal ($ESG) | -26.4% | 112.6% | -32.2% | -2.6% | 100.2% |
| Mail.Ru Group Ltd ($61HE) | 16.6% | 39.9% | 43.1% | 47.4% | 50.5% |
| Lombard Risk Management ($LRM) | | 6.2% | 23.9% | 30.8% | 29.3% |
| Netcall ($NET) | 24.9% | 19.3% | 21.7% | 23.2% | 25.5% |
| Centralnic Group ($CNIC) | 32.0% | 32.9% | 38.7% | 31.1% | 24.8% |
| |
|---|
| Median (37 companies) | 11.0% | 14.1% | 13.3% | 10.9% | 9.7% |
|---|
| Rapidcloud Intl ($RCI) | 14.5% | 47.4% | 46.0% | 52.3% | 28.5% |
Top companies by CAPEX/Revenue, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Anite ($AIE) | 2.7% | 3.0% | 4.0% | 3.9% | 5.8% |
| Statpro Group ($SOG) | 2.8% | 3.1% | 2.0% | 2.9% | 5.8% |
| Wandisco ($WAND) | 1.0% | 0.2% | 2.3% | 4.0% | 4.2% |
| Unisys Corp ($USY) | 3.7% | 2.1% | 2.1% | 2.5% | 4.1% |
| International Bus Mach Corp ($IBM) | 4.2% | 3.8% | 3.9% | 3.7% | 4.0% |
| |
|---|
| Median (37 companies) | 1.5% | 1.4% | 1.5% | 1.6% | 1.9% |
|---|
| Rapidcloud Intl ($RCI) | 2.2% | 0.7% | 1.0% | 23.1% | 11.6% |
Top companies by ROIC, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Eservglobal ($ESG) | -36.0% | 50.0% | -24.8% | -13.0% | 67.9% |
| Lombard Risk Management ($LRM) | | 37.7% | 51.4% | 39.2% | 30.2% |
| Progility ($PGY) | 5.6% | 12.7% | 10.3% | 0.0% | 29.2% |
| International Bus Mach Corp ($IBM) | 33.0% | 36.2% | 36.1% | 31.0% | 28.1% |
| Pennant International Group ($PEN) | 12.6% | 15.3% | 32.3% | 39.1% | 27.3% |
| |
|---|
| Median (37 companies) | 9.2% | 12.2% | 10.1% | 8.9% | 8.3% |
|---|
| Rapidcloud Intl ($RCI) | | 78.8% | 54.1% | 35.5% | 14.9% |
Top companies by Net Debt / EBITDA
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Parity Group ($PTY) | | 6.9x | 4.7x | | 4.9x |
| Escher Group Hldgs ($ESCH) | 5.9x | 2.1x | 0.3x | 0.4x | 2.4x |
| Ubisense Group ($UBI) | -3.7x | -4.2x | -2.2x | -0.4x | 1.8x |
| Progility ($PGY) | 2.3x | 1.0x | 2.0x | | 1.8x |
| International Bus Mach Corp ($IBM) | 0.8x | 0.8x | 0.9x | 1.2x | 1.4x |
| |
|---|
| Median (29 companies) | -1.2x | -0.7x | -0.5x | -0.5x | -0.3x |
|---|
| Rapidcloud Intl ($RCI) | -0.7x | -0.7x | -0.6x | -0.9x | -0.7x |
