ASX All Ords stock, Bravura Solutions Ltd (ASX: BVS), ascended to a three-year high of $2.34 this week.
The tech share has had momentum behind it since the wealth management enterprise software provider upgraded its FY25 guidance last month.
Bravura Solutions now expects cash EBITDA of between $33 million and $36 million. This is well up on its previous guidance of $28 million to $32 million. Bravura also plans to resume paying dividends this year.
After a two-month share price rise of 48.05%, Australian fund manager Forager reckons there's 'more good news to come' for investors in this ASX All Ords stock.
Good times ahead for ASX All Ords stock in 2025
The Bravura Solutions share price is steady at $2.28 on Friday.
S&P/ASX All Ords Index (ASX: XAO) stocks are down 0.4% at the time of writing.
In a new report, Forager said Bravura Solutions had undergone "an amazing turnaround" over the past 18 months. This was largely due to cost-cutting "at a scale not often seen in listed businesses".
The fundie credits the arrival of new managing director Andrew Russell in June 2023 for $67 million in savings to date "with potential for even more over the coming twelve months".
This work has vastly improved the company's financial position, leading to last month's guidance upgrade.
The fundie also noted other "sensible steps", including a 16.3 cents-per-share capital return due on 30 January, the plan to recommence dividends with the upcoming half-year results, and a $56 million one-off software sale to a major customer.
Forager said:
A common benchmark for enterprise software company profitability is 20% cash EBITDA margins, which would have Bravura earning about $50 million of cash EBITDA.
Investor concern has turned from survival and exorbitant costs to lack of revenue growth.
From $250 million of revenue growth in financial year 2023 management is guiding to $240 to $245 million for FY25, slightly higher than initially expected.
The fundie said revenue from Bravura's software was much more valuable than revenue from its projects and consulting services. This was because few customers stopped using the software once they were on it, and the product produced higher gross margins for the company because it was already established.
Forager said:
Importantly, software revenue has been growing. In the 2024 financial year, software revenue rose 10% whilst overall revenue was flat.
With Bravura increasing pricing to customers this year, software revenue is likely to grow again, further improving the reliability of the company's revenue.
Whilst we haven't seen large contract wins with new clients recently, the business has leading products appropriate for attracting them in the UK and Australia.
What about the share price?
Forager said the Bravura share price has increased 170% since it first invested in the ASX All Ords stock.
The investment has been increased as we gained confidence in the investment thesis.
With lower costs and higher revenue on the horizon, there is more good news to come for Bravura.
