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74Software (ENXTPA:74SW): Rebrand and Strong Returns Prompt a Fresh Look at Valuation

Simply Wall St · 1d ago

74Software (74SW) has quietly rebranded from Axway Software, and the stock’s near 44% year-to-date climb suggests investors are reassessing its position in enterprise integration and API management.

See our latest analysis for 74Software.

That rebrand has landed against a backdrop of solid momentum, with a roughly 44% year to date share price return and a three year total shareholder return of about 180%. This suggests confidence is building around 74Software’s growth and profitability story.

If 74Software’s run has you thinking about what else could surprise to the upside, now is a smart time to explore fast growing stocks with high insider ownership.

Yet with earnings growing faster than revenue, a sizable discount to analyst targets and an even larger gap to some intrinsic value estimates, investors face a key question: Is 74Software still undervalued, or is future growth already priced in?

Most Popular Narrative: 23.2% Undervalued

With the narrative fair value sitting above the recent €38.00 close, the valuation case leans on steady growth, margin gains and disciplined discounting.

The recently achieved operational synergies, G&A cost efficiencies, and R&D focus following the Axway/SBS combination are driving improved profitability (margin expansion) and are expected to continue supporting higher net margins as the company standardizes and matures its product offerings.

Read the complete narrative.

Want to see what powers this upside call? The narrative focuses on rising earnings, modest revenue growth and improving margins converging into a re-rated profit multiple. Curious?

Result: Fair Value of $49.47 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, sustained revenue concentration in a few products, along with potential integration setbacks from the Axway and SBS merger, could quickly challenge that upside narrative.

Find out about the key risks to this 74Software narrative.

Build Your Own 74Software Narrative

If you see the story differently or want to dig into the numbers yourself, you can build a personalized view in just a few minutes: Do it your way.

A great starting point for your 74Software research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.