Based on the provided data, here's a comprehensive analysis of SSNC's valuation:
Technical Analysis
The stock shows strong bullish momentum with RSI at 80.44 indicating overbought conditions. The stock is trading above all major moving averages (SMA 5, 10, 20, 60, 200), suggesting a robust uptrend. The Bollinger Band analysis shows the price near the upper band with a bandwidth of 24.48, indicating potential for consolidation.
Valuation Metrics
The stock appears fairly valued to slightly overvalued based on several metrics:
- P/E ratio increased from 20.98 (2022) to 25.62 (2023)
- EV/EBITDA rose from 10.45 to 11.01
- P/S ratio expanded from 2.58 to 2.83
- P/B ratio increased from 2.16 to 2.38
Growth and Profitability
- Revenue grew 4.2% YoY to $5.50B in 2023
- Net income declined 6.6% to $607.1M
- Gross margin improved to 48.19% from 47.61%
- ROE decreased to 9.8% from 10.65%
Recent Developments
- Management projects 5% organic growth for 2025 with a revenue target of $6.2B
- Received multiple positive analyst ratings, including a Buy rating from J.P. Morgan with a $90 price target
- Maintained quarterly dividend of $0.25 per share with a forward yield of 1.13%
Conclusion
While SSNC shows strong technical momentum, the stock appears slightly overvalued at current levels considering the declining profitability metrics and expanding valuation multiples. However, positive analyst sentiment and projected growth could support current valuations.