ClickSoftware is primarily a Workforce and Service Optimization software solutions provider based out of Israel. Before the disappointing 2007 Q3 results the stock traded at a 52-week high of $6.84. The shortfall in revenue translated into a significant pullback and the stock now trades at about 30% below that peak. Even after the pullback, the stock returned 60% in the last year and over the last 5 years the stock price soared 20 times. This performance however is overshadowed as the stock trades about 35% below the price per share at the time of its IPO in June of 2000. Here is a look at the company’s financials over the years:
| Year | 2007(Projected) | 2006 | 2005 | 2004 | 2003 | 2002 |
| Revenues | $41M | $32.43M | $24.08M | $22.71M | $22.41M | $15.75M |
| Software license | 42% | 37% | 34% | 47% | 47% | 45% |
| Services | 58% | 63% | 66% | 53% | 53% | 55% |
| R&D Expenses | 14% | 13% | 13% | 12% | 9% | 18% |
| Net Income (loss) | $0.12 | $0.08 | $(0.07) | $0.03 | $0.06 | $(0.40) |
Revenue has more than doubled in the last 5 years giving it a compounded annual growth rate (CAGR) on a revenue basis of about 15%. 2006 saw a revenue growth rate of about 35% and 2007 growth is expected to be slightly below that level. ClickSoftware has managed to be only marginally profitable over the years. It is projected to have a net income of $0.12 per share this year and close to $0.20 per share next year. That level of profitability will result in a forward PE of 24 at the current price. They are expected to grow at a 30-35% revenue and earnings growth going forward.
Software license as a percentage of total revenue has consistently clocked in below 50%. It dropped as low as 34% in 2004 before rebounding to the current run rate of 42% for fiscal 2007. To see margin improvement, it is imperative that management focus on driving that number up to the 75% range to be allied with highly profitable software enterprises.
ClickSoftware (CKSW) Analysis:
1. ClickSoftware (CKSW) - Part 1 - Introduction.
2. ClickSoftware (CKSW) - Part 2 - Business Issues.
3. ClickSoftware (CKSW) - Part 3 - Outlook.
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