In morning trade the Class Ltd (ASX: CL1) share price has edged higher following the release of another strong quarterly update.
Highlights from the release include:
- Portfolios increased by 5,520 to 135,736. This is a record increase for the March quarter.
- Total portfolios now include 132,873 SMSFs on Class Super and 2,863 investment portfolios on the Class Portfolio product.
- Class Super market share increased to 22.4% of the estimated 593,000 SMSFs.
- 4% increase in Class SMSFs outpaced estimated industry growth rate of 1.3% over the same period.
- 26% of Class subscribers are now using Class Portfolio.
Overall I felt this was yet another positive update from the fast-growing self-managed super funds software provider.
I've been very impressed at the way the company has been able to grow its portfolios. Not only was the March quarter a record, but it outpaced the industry growth by a considerable margin.
The good news is that I believe this level of growth can continue for some time. Earlier this year the company estimated that just 28.2% of all SMSFs were being managed in the cloud.
As the migration to the cloud gathers pace, I expect Class to be in a great position to profit. After all, as I have said previously, the company commands a 68% share of the cloud market and captured 80% of all SMSF migrations to the cloud in FY 2016.
Should you invest?
I think today's quarterly update justifies my view that Class would be a great buy and hold investment today.
Whilst its shares may not be cheap at 51x trailing earnings, I believe the company's strong growth prospects more than justify the premium.
As a result, I would put it up there with XERO FPO NZX (ASX: XRO) and Emerchants Ltd (ASX: EML) as one of the best fintech investment options on the market.
