Jim Simons (Trades, Portfolio) purchased a 438,900-share stake in Xactly Corp. (XTLY, Financial) at an average price of $9.27 per share in the second quarter. Since the purchase, Xactly’s market price has soared, gaining an estimated 50%.
Xactly has a market cap of $433.59 million, an enterprise value of $403.03 million, a price-book (P/B) ratio of 55.96, a current ratio of 1.06 and a quick ratio of 1.06.
Simons is an American mathematician, physicist, hedge fund manager and philanthropist. He founded the hedge fund Renaissance Technologies in 1982, which he ran for 28 years before retiring at the end of 2009. Simons remains at Renaissance Technologies, but he works in a less stressful position as the nonexecutive chairman.
Xactly was incorporated in March 2005; the company is a leading provider of (SaaS) software as a service that provides enterprise-class, cloud-based, incentive compensation solutions for employee and sales performance management. It has customers with subscribers located internationally across numerous industries such as business and financial services, communications, high-tech manufacturing, life sciences, media and Internet.
Xactly sells its solutions through its direct sales force located in San Jose, California, Denver, Washington, D.C., and London. As of Jan. 31 the company had 870 customers with approximately 266,000 subscribers, compared to approximately 194,000 subscribers in January 2015, representing an increase of approximately 37%.
According to GuruFocus Xactly has a 5 of 10 financial strength rating with a 0.09 equity-asset ratio and an Altman Z-Score of 1.01 indicating that the company is in the distress zone and in danger of filing for bankruptcy within the next two years. The company also has a 2 of 10 profitability and growth rating with an operating margin of -22.34%, a net-margin of -28.60%, an ROE of -181.94%, an ROA of -27.39% and an ROC (Joel Greenblatt (Trades, Portfolio)) of -230.76%.
Xactly offers multiple cloud-based programs to improve its clients' incentives programs, increase employee motivation and help managers reach their quotas. Xactly has multiple streams of income from multiple products. It has established itself with more than a decade of operating experience, and it already has 870 customers with 266,000 subscribers. Xactly has also been able to increase its subscribers by an estimated 37% over the previous year, which has given the company a lot of momentum, and the opportunity to increase revenue, and gross profit at an exponential rate.
Disclosure:Â Author does not own any shares of this company.
Start a free seven-day trial of Premium Membership to GuruFocus.
Also check out:
