The ASX tech share Siteminder Ltd (ASX: SDR) could be one of the best businesses to buy right now, given its growth prospects and appealing valuation.
Siteminder is the name behind Siteminder software, which it calls the world's leading hotel commerce platform. It also operates Little Hotelier, an all-in-one hotel management software offering.
The Siteminder share price has drifted lower after it reported its FY26 result, and I think this represents a particularly good buying point considering its improving financials.
Let me explain why I think it's such an appealing buy.
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Strong revenue growth
The company is delivering strong growth with its revenue, which is helping increase the scale of the business every year.
In FY26, the ASX tech share delivered revenue growth of 18.6% to $266.1 million, demonstrating strong performance despite softer travel conditions.
It showed resilience and growing traction from new product initiatives such as the smart platform. The smart platform represents multiple new modules that give hotels more analytics, intelligence and even automated room price features.
The company's annual recurring revenue (ARR) rose 14.9% to $313.7 million, which suggests FY27's revenue figure already has some pleasing growth baked in.
During FY26, the company added 5,900 hotel properties to its client list, taking the total to 56,000. Average revenue per user (ARPU) increased 5.9% to $429, largely thanks to increasing smart platform adoption and deeper product penetration.
Siteminder expects its ARR to grow at a compound annual growth rate (CAGR) in the "20s" in percentage terms between FY26 to FY30, on a constant currency and organic basis. I think most companies would be happy to grow revenue at a strong pace.
Improving profit margins
I think one of the best signs of a compelling ASX tech share is one where its profit margins are rising as it grows. Operating leverage is a very powerful force to help the compounding of earnings.
In FY26, the company's adjusted operating profit (EBITDA) soared 96.5% to $28.1 million, while reported operating profit (EBITDA) rocketed 244% to $24.4 million – the reported figure included $3.8 million of restructuring and other costs.
Other profit margins also increased during the period. It noted that adjusted free cash flow improved by 123% to $10.5 million.
Siteminder expects its adjusted EBITDA margin to expand meaningfully in FY27. The adjusted EBITDA margin is expected to reach the mid-20s in FY30.
If revenue is growing strongly and the margins are going up, the bottom line could improve significantly.
Pleasing valuation
The ASX tech share is projected by analysts to quickly turn quite profitable over the next couple of financial years. According to the projection on Commsec, the Siteminder share price is valued at 29x FY28's estimated earnings.
For a business that could be growing revenue by at least 20%, I think that the valuation looks cheap following its 50% decline this year.
