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Is the Bravura Solutions Ltd share price a bargain today?

ASX tech shares

The Bravura Solutions Ltd (ASX: BVS) share price has jumped more than 19% in the past month to trade at $1.59, but has hardly budged from its November 2016 IPO price of $1.45.

A month ago, the share price was trading even below the IPO price. As we wrote at the time, it didn’t appear to be an expensive IPO price trading on a P/E of 14.8x and a decent forecast dividend yield of between 4.1% and 5.4% based on payout range of 60% to 80% of earnings.

In February, Bravura unveiled half-year results to end of December 2016 that exceeded expectations in the IPO. Operating earnings before interest, tax, depreciation and amortisation (EBITDA) came in at $18.2 million, beating the prospectus forecast of $17.7 million.

Revenue for the company’s key product, Sonata, has been growing strongly and is expected to continue growing with forecasts of $92 million for the full 2017 financial year (FY2017). That is around 50% higher than FY2016’s $66.8 million revenue for Sonata.

The software company caters to the wealth management and funds administration industries and says it has more than 75 blue chip clients with $2.3 trillion of assets under advice (AUA) across 12 countries. Competitors in those sectors include Hub24 Ltd (ASX: HUB), Praemium Ltd (ASX: PPS), GBST Holdings Limited (ASX: GBT), Onevue Holdings Ltd (ASX: OVH), Class Ltd (ASX: CL1) and Link Administration Holdings Ltd (ASX: LNK).

Foolish takeaway

The tailwinds in the wealth management industry, particularly in Australia, bode well for companies like Bravura Solutions. The current price could be an opportunity for Foolish investors.

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Motley Fool contributor Mike King has no position in any stocks mentioned. You can follow Mike on Twitter @TMFKinga

The Motley Fool Australia owns shares of Class Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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