$ISDR update

A year ago I wrote a post on Issuer Direct. Since then the shares have done well and are up about 130%. This compares to the Russell 2000 and Nasdaq which are up about 60% and 40% respectively. It’s easy to take a victory lap here, but really I should have purchased more shares as the company executed and shares were still well below $20.

Update

ISDR has been to navigate the current landscape very well and capitalize on the WFH/remote climate. They quickly pivoted their product development to service customers in the new environment by offering virtual meetings and investor conferences.

They have managed to grow customer count throughout 2020, particularly on the private company side.

Initially, my thoughts were that many small and medium sized public companies would migrate to ISDR products. My thinking was that public companies would utilize ACCESSWIRE (as a standalone or through a Platform id subscription). The more I learned about the business, the more I appreciated the potential, at least in the short to medium term, is with private companies.

Given how underserved private companies are, product development and marketing have been focused here. A couple of new products are expected to be launched later this year to drive new customer growth as well as ARPU. As well the company continues to invest in ACCESSWIRE with the recent addition of e-commerce.

Valuation

I know valuation is a curse word in 2021, regardless a quick look at valuation shows that ISDR has managed to catch a bid. Though not cheap, this isn’t something that is overpriced in my mind.

Looking at forward (2022) estimates the numbers look a little more appealing. Of course, such estimates could be off so take them with a grain of salt.

Long Term

Looking to the future, I would expect more customers to become subscribers to Platform id. This gives an indication that customers are not just utilizing ISDR for infrequent use of a few products, but that on the aggregate the customers see value in utilizing much (if not all) of the Platform id suite.

As of Q1 the company had 386 Platform id subscribers with a goal of hitting 500 by end of the year. This is a metric I will be watching closely.

Risks

  • In the short term, the company continues to expand headcount and invest in R&D. This could lead to some operating margin compression until they scale into the new expenses.
  • The new products (newsroom and brand asset manager) could be delayed or adoption could be slower than expected.
  • The company could execute well, but the valuation could contract.
  • Q2 2021 is when the tougher comps present themselves and shares could churn sideways for awhile if the market expects higher growth rates than ISDR provides.

Conclusion

I continue to hold my shares and am looking to average up as the opportunity presents itself. I consider ISDR a core holding as part of my portfolio. I believe there is lots of white space for the company and wouldn’t be surprised if a larger competitor attempts to gobble ISDR up. As well, they could use cash and/or lever up the balance sheet a bit for an acquisition.

Anyone else follow ISDR?

Cheers,

Dean

*I am long ISDR at time of writing.

1 Comment

Filed under Company Updates

One response to “$ISDR update

  1. Pingback: June 2021 Update – $CSW/A.to, $OSS.v, $PSD.to, $IDG.to, $STC.v, $MCB.to, $MTLO.v, $SVT, $FXC.to, $URB/A.to | Petty Cash

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