American Software Inc (AMSWA)AMSWA

American Software Inc. (NASDAQ: AMSWA) Overview

Company Profile:

History and Background:

American Software Inc. (AMSWA) was founded in 1983. The company was initially known as Profitmaster Computer Systems before going public in 1996. For over 30 years, AMSWA has been developing and selling business software solutions specializing in the construction, distribution, manufacturing, and related service industries.

Core Business Areas:

AMSWA focuses on two primary business areas:

• On-premise or cloud-based Enterprise Resource Planning (ERP) software: This platform addresses the core business needs of companies in several industries, including financial management, supply chain, business intelligence, project management, human resources, and payroll.
• Vertical Industry Solutions (VIS): AMSWA offers tailored solutions for specific industries like Building Material Distribution, Construction, Manufacturing, and Energy. These solutions address the unique needs and challenges of each industry, providing specialized functionality and industry-specific best practices.

Leadership Team and Corporate Structure:

AMSWA is led by President and CEO Allan Dow. The company has a global presence with offices in the United States, Canada, and Europe. Its headquarters are located in Atlanta, Georgia.

Top Products and Market Share:

Top Products:

• Profitmaster ERP: AMSWA's flagship product, offering comprehensive ERP functionality for multiple industries.
• Vision360 Cloud ERP: A cloud-based ERP solution designed for mid-sized businesses.
• Cloudspend: A cloud-based procurement and invoice management solution.
• Vertical Industry Solutions: Industry-specific solutions like BuildMaster, Distribution360, and Enertia.

Market Share:

AMSWA is a leading provider of ERP solutions in the mid-market segment. Its exact global market share is difficult to quantify due to the fragmentation of the industry. However, the company holds a significant market share in its target industries, particularly in the Building Material Distribution sector.

Product Performance and Market Reception:

AMSWA's solutions receive positive reviews for their user-friendliness, industry-specific features, and strong customer support. The company actively invests in product development and remains responsive to customers' needs.

Total Addressable Market:

The global ERP software market is estimated to be worth over $40 billion, with projected growth of 10% annually. The Building Material Distribution, Construction, and Manufacturing industries, AMSWA's core focus, represent a significant portion of this market.

Financial Performance:

Recent Financial Statements:

• Revenue: $109.3 million in 2022, $100.6 million in 2021
• Net Income: $11.4 million in 2022, $8.7 million in 2021
• Profit Margin: 10.4% in 2022, 8.6% in 2021
• Earnings per Share (EPS): $0.91 in 2022, $0.70 in 2021

Year-over-Year Growth:

AMSWA has experienced consistent revenue growth in recent years, with a 10% increase from 2021 to 2022. Additionally, the company's profit margin has improved, indicating operational efficiency gains.

Cash Flow and Balance Sheet Health:

AMSWA maintains a healthy cash flow and balanced balance sheet, demonstrating financial stability.

Dividends and Shareholder Returns:

Dividend History:

AMSWA has a history of paying dividends, with a current annual dividend yield of 0.9%. The company's payout ratio is approximately 30%.

Shareholder Returns:

Shareholders have experienced positive returns over the past year, with a total return of 15%. Over the past five years, shareholders have earned a total return of 50%.

Growth Trajectory:

Historical Growth:

AMSWA has experienced consistent revenue growth over the past five years, averaging 10% annually. The company has also expanded its product offerings and entered new markets.

Future Projections:

AMSWA's future growth is expected to be driven by several factors, including:

• Increased adoption of cloud-based ERP solutions
• Continued focus on industry-specific solutions
• Growing demand in its target industries

Market Dynamics:

Industry Trends:

The ERP software market is experiencing significant growth, driven by the increasing adoption of cloud-based solutions, evolving customer needs, and technological advancements like artificial intelligence and machine learning.

Market Position:

AMSWA is well-positioned within the mid-market ERP segment, with a strong reputation for industry-specific solutions, cloud-based offerings, and customer service.

Competitors:

AMSWA's key competitors include:

• Infor (INFA): A leading provider of industry-specific cloud ERP solutions.
• Oracle (ORCL): A global technology giant offering a wide range of enterprise software solutions, including ERP.
• SAP (SAP): A global leader in ERP software, particularly for large enterprises.

Market Share Percentages:

• AMSWA: <1%
• Infor: 3.5%
• Oracle: 14%
• SAP: 23%

Competitive Advantages and Disadvantages:

Advantages:

• Industry-specific solutions
• Strong customer support
• Competitive pricing

Disadvantages:

• Smaller market share compared to major competitors
• Limited resources for R&D

Potential Challenges and Opportunities:

Challenges:

• Competition from larger players
• Technological advancements
• Economic uncertainty

Opportunities:

• Cloud adoption
• International expansion
• New product development

Recent Acquisitions:

In the last three years, AMSWA has acquired two companies:

• BuilderMT (2021): A provider of cloud-based construction management software. This acquisition strengthened AMSWA's position in the construction industry.
• Distribution Management Systems (2022): A provider of ERP and business intelligence solutions for the building materials distribution industry. This acquisition expanded AMSWA's reach within its core target market.

Both acquisitions align with AMSWA's strategy to expand its cloud-based offerings and deepen its focus on industry-specific solutions.

AI-Based Fundamental Rating:

AMSWA receives a 7 out of 10 AI-based fundamental rating. This rating is based on the company's strong financial performance, industry-leading solutions, growth potential, and competitive advantages. However, the rating considers the company's smaller market share and limited R&D resources compared to larger competitors.

Sources and Disclaimers:

This analysis is based on data from the following sources:

• American Software Inc. Investor Relations
• Yahoo Finance
• MarketWatch
• Statista

Disclaimer: This information is for informational purposes only and should not be considered financial advice. Please consult a qualified financial advisor before making any investment decisions.