In a market flooded with headlines about soaring tech giants, it’s easy to overlook solid businesses that quietly deliver value. However, the best investment opportunities are not always the flashiest. In reality, they’re the ones hiding in plain sight. With strong fundamentals, consistent performance, and long-term potential, this small-cap stock could provide significant value to patient investors.
Asure Software (ASUR), valued at $274.5 million, is a small-cap company that offers cloud-based human capital management (HCM) solutions to help small and medium-sized businesses manage their payroll, human resources, tax compliance, and employee benefits. ASUR stock has risen 13.2% year to date, outperforming the broader market.
Impressed with its first-quarter earnings, Wall Street analysts project the stock could soar as high as 85% from current levels.
Asure reported first-quarter revenue of $34.9 million, a 10% increase year-over-year. Core business revenue increased 13%. Management attributed the company’s strong performance to continued momentum in its Payroll Tax Management product, as well as growing traction in its Payroll, Benefits, and Marketplace offerings. Recurring revenue totaled $33.2 million, up 10% from the prior year, accounting for 95% of overall revenue. This substantial amount of recurring revenue is a strong indicator of business stability and client retention.
While the company reported a $2.4 million net loss, adjusted EBITDA increased to $7.3 million, compared to $6.8 million a year ago. Importantly, CFO John Pence stated that most of the “heavy lifting” on cost infrastructure is now complete, implying that Asure anticipates a flatter cost structure in the coming quarters, allowing incremental revenue to contribute efficiently to the bottom line.
The company has been working to create a more unified client experience and expand its solution set. It has grown organically by cross-selling, upselling, expanding its product offerings, and converting resellers into direct customers. Meanwhile, strategic M&A activity helped drive inorganic growth. To support this strategy, Asure signed a new $60 million credit facility, drawing down $20 million in April to fund customer acquisition and product suite expansion.
