Premiere Global Services: More Upside Ahead As Investments In SaaS Growth Accelerate
- PGI keeps its strong economic moat, serving 75% of Fortune 100 companies and ~45,000 other businesses.
- Thanks to strong new investments, SaaS-fueled acceleration of overall growth to ~10% annually proves to be more durable than many expected. This will force stock P/E expansion soon.
- The planned increased investment into SaaS product development, marketing and sales force in the second half of 2014 will further accelerate PGI’s sales growth.
- PGI has ~28% upside within 12 months and further ~10% to 15% annually, based on just 7% sales growth and 8.5% FCF growth expectations for the next 10 years.
- Even if growth decelerated back to past-decade rates of 3.5%, which I don’t expect, the stock would still be slightly undervalued and offer long-term, ~10% stock appreciation potential.