SiteMinder: Initiating With an AUD 10 per Share Fair Value Estimate and Narrow Moat Rating

We initiate coverage on SiteMinder with a fair value estimate of AUD 10 per share. We assign SiteMinder a narrow economic moat based on switching costs and, eventually, network effects. We forecast revenue to grow at a 10-year compound annual growth rate of 24% and EBIT margins to expand to 16% by fiscal 2033 from negative 32% in fiscal 2023. We use a weighted cost of capital of 9%. We assign the company a Morningstar Uncertainty Rating of High and a Morningstar Capital Allocation Rating of Exemplary. At current prices, SiteMinder shares screen as materially undervalued and not reflective of our view of the company as an industry leader with a large and highly winnable market opportunity.