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Editor's notes: ELLI trades at a discount to SaaS peers despite its sector leadership. As management exceeds conservative guidance in coming quarters, the stock should erase the discount.

Investment Thesis

Ellie Mae (ELLI) is the largest provider of SaaS-delivered mortgage origination software to the mortgage origination market. The company has steadily increased revenue, gross margins and cash flow due to its compelling value proposition, industry tailwinds, and organic and inorganic growth initiatives. ELLI generated RoE of 10-11% in the last year while re-investing for growth. The company is positioned for growth and strong cash flow generation despite near-term headwinds in mortgage origination volume.

Capitalization - ELLI Trading Statistics - ELLI
Price $24.03 52 week High $30.59
Diluted Shares Outstanding 28.0 52 week Low $14.84
Market Cap $671.9 Avg. Dly. Trade. Vol. (MM) 0.49
Float % 90.5%
Cash and Investments $113.2 LTM 2013
Debt 0 TEV /

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