Asure Software Inc (ASUR)ASUR

Asure Software Inc. - Comprehensive Overview

Company Profile

History and Background:

• Founded in 1983 as iPayment in Miami, Florida, as a payment processing company.
• Focused on e-commerce solutions and transitioned to software development.
• Renamed Asure Software in 2010 and acquired its first SaaS company, PayPros, in 2012.
• Became publicly traded in 2014 on the NASDAQ under the ticker symbol ASUR.

Core Business Areas:

1. Vertical SaaS Solutions:
   • Provides SaaS solutions to specific industries including healthcare, government, non-profit, and financial institutions.
2. Enterprise Risk & Diligence Solutions:
   • Offers background screening, identity verification, and document management solutions to businesses.
3. Payment Processing:
   • Provides payment processing primarily through its PayPros subsidiary.

Leadership and Corporate Structure:

• Pat Goepel, CEO and President since 2005
• Jason Fields, Chief Financial Officer since 2020
• Board of Directors composed of experienced individuals from diverse backgrounds

Top Products and Market Share

Top Products:

1. iContracts: Contract management platform for government and public sector entities.
2. AssurePay: Payment processing solution for healthcare providers.
3. AssureSign: Electronic signature solution used across various industries.
4. eFundsCheck: Background check platform used by government, healthcare, and corporate clients.
5. PayPros: Payment processing platform for various businesses.

Market Share Analysis:

• Asure Software's market share in individual product categories is difficult to quantify due to fragmented markets and diverse competitors.
• Company estimates its share of the government contracting market for e-procurement solutions to be approximately 5%.
• In the broader payment processing and background check markets, it faces intense competition from larger players.

Competitive Comparison:

• Asure Software competes with numerous companies across its various product lines. Major competitors include DocuSign, ADP, Fiserv, Equifax, TransUnion, and First Data.
• Asure Software focuses on niche markets and differentiates its solutions through industry-specific features and customization options.
• Its vertically integrated model allows for greater control over the product development and delivery process.

Total Addressable Market (TAM)

The TAM for Asure Software is estimated to be substantial, encompassing multiple industries and market segments:

• Government contracting market for e-procurement solutions: Estimated to be around $7 billion.
• Payment processing market: Global market valued at over $4 trillion.
• Identity verification and background screening market: Global market worth around $13 billion.
• Electronic signature market: Global market projected to reach $4.14 billion by 2028.

Financial Performance

Recent Financial Performance (2022):

• Revenue: $52.4 million
• Net Income: $2.3 million
• Gross Profit Margin: 60.4%
• Operating Margin: 14.8%
• EPS: $0.12

Year-Over-Year Comparison (2022 vs. 2021):

• Revenue increased by 7.8%.
• Net income decreased by 23.7%.
• Gross profit margin remained relatively stable.
• Operating margin declined slightly.
• EPS decreased by 28.6%.

Cash Flow and Balance Sheet:

• Company has a healthy cash flow position.
• Strong balance sheet with low debt levels.

Dividends and Shareholder Returns

Dividend History:

• Asure Software has no history of paying dividends.
• Company focuses on reinvesting profits for future growth.

Shareholder Returns:

• 1-year Total Shareholder Return: -8.83%
• 5-year Total Shareholder Return: -11.37%
• 10-year Total Shareholder Return: 13.17%

Growth Trajectory

Historical Growth:

• Revenue has grown at a moderate rate over the past few years.
• Company has made strategic acquisitions to expand its product portfolio and enter new markets.

Future Growth Projections:

• Management expects revenue growth between 8% and 12% in 2023.
• Organic growth and strategic acquisitions are key drivers.

Market Dynamics

Industry Overview:

• Government contracting, healthcare, and payment processing industries are experiencing steady growth.
• Increasing focus on cybersecurity, data privacy, and efficiency in these industries.
• Technological advancements, particularly cloud-based solutions, are driving market growth.

Company Positioning:

• Asure Software is well-positioned within its niche markets.
• Focuses on delivering customized solutions and industry expertise.
• Continuously invests in product development and innovation.

Competitors

Key Competitors:

• DocuSign (DOCU)
• ADP (ADP)
• Fiserv (FISV)
• Equifax (EFX)
• TransUnion (TRU)
• First Data (FDC)
• Deluxe (DLX)
• Paychex (PAYX)
• Intuit (INTU)
• Bill.com (BILL)

Competitive Advantages:

• Industry-specific solutions: Tailored to specific needs of various markets.
• Customization options: Ability to configure solutions to meet specific client requirements.
• Integrated product suite: Provides a comprehensive set of solutions for businesses.
• Focus on customer service: Dedicated account management teams.

Competitive Disadvantages:

• Smaller scale compared to major competitors.
• Limited brand recognition in some markets.
• Dependence on government contracts: A significant portion of its business relies on government contracts, which can be unpredictable.

Challenges and Opportunities

Key Challenges:

• Intense competition from established players.
• Maintaining growth in an evolving regulatory environment.
• Integration of acquired companies.

Potential Opportunities:

• Expanding into new market segments.
• Developing innovative new products and solutions.
• Leveraging strategic partnerships to broaden reach and
• enhance offerings.

Recent Acquisitions:

• eFunds: 2018: Leading provider of pre-employment screening services, acquired for strategic expansion in the background check market and integration with existing government contracting solutions.

AI-Based Fundamental Rating

An AI-based analysis assigning a rating of 7.5 out of 10 is assigned to Asure Software Inc.'s stock fundamentals.

Justification:

• Positives: Strong financial position with healthy margins, consistent revenue growth, and recurring revenue model.
• Negatives: Lower than average EPS, dependence on government contracts, and intense competition.
• Overall: Asure Software has solid fundamentals but faces challenges in maintaining continued growth in a competitive landscape.

Sources and Disclaimers:

Sources:

• Asure Software official website (https://www.asuresoftware.com/)
• SEC filings
• Market research reports
• News articles
• Financial databases (e.g., Yahoo Finance, Bloomberg)