Siteminder Ltd (ASX: SDR) shares have fallen almost 60% over twelve months, and the brokers covering the company now think there is more upside than downside.
The stock trades at $2.80 against a 52-week range of $2.60 to $7.96.
The majority of brokers hold a buy rating, and the $5.40 average target implies roughly 90% upside.
The market capitalisation is now under $804 million.
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Why SiteMinder shares collapsed
The company sells an e-commerce platform to hotels and other accommodation businesses.
The shares have dropped around 27% since the FY26 result in late August and are down 52.30% for the calendar year.
Two things caused the damage.
The first was the broad de-rating of ASX technology shares, as investors questioned whether artificial intelligence erodes software business models.
The second was specific and came from the outlook statement.
What the FY26 result showed
Weirdly, the numbers were the best in the company's history.
Revenue rose 22% on a constant currency and organic basis to $266.1 million.
Adjusted earnings before interest, tax, depreciation and amortisation jumped 96.5% to $28.1 million.
The margin expanded to 10.6% and the net loss narrowed to $11.3 million from $24.5 million.
Annual recurring revenue grew 24.1% to $313.7 million and adjusted free cash flow more than doubled to $10.5 million.
The operating detail was good too.
Transaction revenue grew 34% and average revenue per user climbed 9.3% to $429.
SiteMinder now serves 56,000 hotel customers globally, with the Channels Plus hotel count up 43%.
Adjusted gross margin reached 67.2%.
More than 85% of customer billings are in foreign currencies, so a stronger Australian dollar impacted earnings.
Chief executive Sankar Narayan pointed to the trajectory of the company:
SiteMinder's FY26 performance builds on three years of sustained progress. Subscription and transaction ARR growth have exceeded 15% and 30%, respectively, on a constant-currency and organic basis in each of those years, while adjusted EBITDA has improved by more than $50 million with margins expanding from negative 14.5% to positive 10.6%.
The guidance that sank SiteMinder shares
Management expects the adjusted EBITDA margin to keep expanding in FY27 and reach the mid-20% range by FY30.
Annual recurring revenue is targeted to grow at around 20% a year over the next four years.
Herein lies the problem.
ARR grew 24.1% in FY26, so a 20% target is a deceleration.
A mid-20% margin by FY30 is four years away for a company that just posted margins of 10.6%.
Investors who had priced in faster compounding left.
There is a reasonable counter-argument.
Guiding to 20% ARR growth after delivering 24.1% is conservative rather than alarming, and management has beaten its own numbers for three consecutive years.
The margin path is also cumulative, so each year of expansion compounds against a larger revenue base.
None of that helped a share price that had been priced for perfection.
Foolish takeaway
The bear case on SiteMinder shares is that the company will likely exhibit slowing growth from here.
The bull case is that a business growing recurring revenue at 20% with expanding margins should not be valued at $804 million.
I think the sell-off has gone too far, because the FY26 execution was strong and the balance sheet no longer needs rescuing.
The risk is that global travel softens while households everywhere tighten, and hotels are not immune to that.
