“AvePoint is trading at 5.8 times 12-month forward EV/Sales, at a 40% discount to peers despite offering a 22% revenue CAGR over FY2024 to FY2026 versus the peer average of 13%. Our target price is based on an 11x forward EV/Sales, about 13% above the peer average for its superior growth,” Mittal wrote in his Oct 6 note.
AvePoint is the largest third-party data management provider for Microsoft 365, serving platforms such as Teams and SharePoint.
Revenue grew 20% between FY2022 and FY2024, led by the Resilience suite (62% of ARR), which ensures business continuity and compliance; the Control suite (28%), which automates governance and security; and the Modernisation suite (11%), which helps clients migrate legacy systems to modern SaaS platforms. Growth has also been supported by the adoption of Microsoft’s Copilot AI model, which fuels demand for secure, AI-ready data environments.
Geographically, the firm derives 41% of revenue from North America, 30% from EMEA, and the remaining from Asia Pacific, which is the fastest-growing region with a 28% CAGR over FY2022 to FY2024.
Multi-platform and channel-driven growth
According to the International Data Corp, AvePoint’s total addressable market stood at US$81.3 billion ($105.1 billion) in FY2024 and is projected to grow 14% CAGR to US$136.5 billion by FY2028.
Management targets US$1 billion in annual recurring revenue (ARR) by FY2029, up from US$327 million in FY2024. Three-quarters of that ARR is expected to come through channel partners as the firm scales its Confidence Platform, deepens cross-sell opportunities, and expands integrations with Google Cloud and AWS to diversify beyond Microsoft’s ecosystem. It is also pursuing selective M&A to strengthen capabilities and extend its global footprint.
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In parallel with top-line expansion, AvePoint has set a long-term operating-margin target of 27.5% “This reflects a disciplined focus on profitable growth, underpinned by increasing scale, a high proportion of recurring revenue, and ongoing improvements in operational efficiency,” notes Gerald Wong, founder and CEO of investment platform Beansprout.
Wong, who did not assign a rating, notes that AvePoint’s financial profile is improving. He cites that the company is nearing the software-as-a-service (SaaS) industry’s Rule-of-40 benchmark with a score of 38% in 2024, up from 31% a year earlier. “This metric, which combines ARR growth with operating margin, highlights the company’s progress in balancing growth with profitability.” However, he also cautioned that the firm’s heavy reliance on the Microsoft ecosystem and rising competition could pose headwinds.
As at 1.50pm, shares in AvePoint are trading 58 cents higher, or 3.04% up, at $19.69.
