Buying This Mission-Critical SaaS Platform Serving Public Safety 26xEV/FCF for 20% CAGR 4yr Forward Growth
20% organic growth + x% from new found M&A allocation. No debts, 30% free cash flow margin. Thrive in a fragile world.
Today, I bought a sleep well business that:
Scores 14/20 points on my sleep well checklist. (vs. 12.8 average)
Possesses deep and widening moats - scale/cost, switching cost, brand, and incredibly high barriers to entry.
This SaaS platform has multiple growth levers (organic, product cross-sell, geography, M&A)
Due to the recent CEO transition, the market is underappreciating the quality and expecting a free cash flow growth of just 7.5% CAGR over the next decade, compared to an achievable 15% CAGR.
I am buying this business today because it adds a unique defensive angle (an anti-fragility quality) to the Sleep Well Portfolio.
In case you missed it, recently, I shared the following:
20th Sleep Well Pick - Boring and Anti-fragile
Sleep Well Portfolio May Update - 64% Annualized Return
Transition of the Mercado Libre CEO.
Q1’25 results review: VAT, Kinsale, MIPS, Mercado Libre, Sea Limited, and Grab.
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Let’s examine what I bought today and how it fits the Sleep Well Portfolio.