Class Ltd (ASX: CL1) has released its September 2019 quarter update to the market, is the share price a buy?
Class is a software company which specialises in products for financial advisers and self-managed superannuation funds (SMSFs). These are called the Class Portfolio And Class Super, respectively.
What Was In Class’ September 2019 Update?
Class revealed that its total accounts have grown to 181,355 accounts, which is an increase of 2,273 accounts, or 1.27%, from the June 2019 quarter. The number of total customers increased by 13 to 1,558.
Despite around 700 net AMP Limited (ASX: AMP) account suspensions, the all-important Class Super product saw an increase of 1,108, or 1%, to 172,555 accounts. Class Portfolio grew to 8,205 accounts and Class Trust ended the quarter with around 600 accounts.
Class Trust is a new product that is aimed at trusts because they’re the primary wealth vehicle outside of SMSFs and the current accounting solutions in the market are ripe for disruption according to Class. Class is working with customers to design a product that will meet their needs like Class has done with Class Super.
The Class Trust product increases its addressable market by a similar size to the SMSF sector.
Class management are pleased with the progress of Class Trust and are encouraged by the positive feedback by customers at Class Connect.
Class is working with Findex to develop Class Trust, Findex CEO Spiro Paule said: “Findex has had a strong relationship with Class for more than 5 years, working on Class Super and now Class Trust together. Class’ focus on continual software improvement is very much aligned to our philosophy of using tech and relationships to provide exceptional service to our clients.”
Is Class A Buy?
Class is re-positioning to turn itself around. It’s valued at just under 20 times the 2019 financial year earnings. If it can keep growing its profit at a decent pace then today may actually be a decent time to buy, most other software companies have very high valuations.
But I think there could be better growth opportunities on the ASX such as the shares in the free report below which are growing globally.
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