Siteminder Ltd (ASX: SDR) shares have gone through a tough run, falling more than 50% since October 2025, as the chart below shows. I think the ASX share is now heavily undervalued for its long-term future and is one of Australia's top shares.
Siteminder provides software to help hotels around the world run their operations, analyse demand and room rates, and advertise their rooms.
It's understandable investors are uncertain about what could happen next with the possibility of AI competition. At this price, I think the business' ongoing rapid growth will help spur strong shareholder returns.
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Strong revenue growth
One of the biggest drivers in deciding the returns of a business is how much revenue growth they can produce.
Revenue growth is the start of a financial flowchart that ends with the net profit.
In the FY26 half-year result, Siteminder reported total revenue growth of 25.5% to $131.1 million.
Subscription revenue grew 17.7% to $78.1 million thanks to property growth and average revenue per user (ARPU) expansion. It added 2,900 properties during the FY26 first-half, taking its total properties to 53,000 – it continues to target larger hotel properties.
On the transaction revenue growth side of things – which includes its new initiative smart platform contributions – the company saw revenue reach $53 million, up 39.1%.
It's good to see there are various elements helping the business grow, which I think is a key sign for it being one of Australia's top shares.
Big ambitions
One of the main factors that ultimately decides how big the returns can be is how large the company can become compared to what it is today. How much can the company grow its revenue? What is its total addressable market? What growth rate can it maintain?
Siteminder thinks it could grow its ARPU by five times if its existing customer base fully adopts its smart platform. The ASX share believes that AI can increase "pricing dynamism and distribution complexity". Siteminder thinks it can capture a greater share of the market over time.
As its smart platform scales, management believe it positions Siteminder to accelerate towards its annual 30% revenue growth in the medium-term. I think any business growing revenue at that speed is worthwhile considering.
Rising profit margins
One of the most appealing things about a software business is how much operating leverage they have. In other words, they can deliver rising profit margins as they grow larger, allowing their net profit to soar. That's a great sign of it being one of Australia's top shares.
Time will tell how high the company's profit margins can go, but the signs looked positive in the FY26 first half. The adjusted group gross profit margin improved 98 basis points to 67.8%, while the adjusted operating profit (EBITDA) more than doubled to $12.3 million and the adjusted net loss more than halved to $3.9 million.
Pleasingly, the adjusted free cash flow was positive, reaching $2.7 million compared to a $0.6 million loss in the first half of FY25.
In the coming years, I expect Siteminder's net profit and cash flow to soar, which should hopefully justify a higher Siteminder share price.
