In morning trade the iSentia Group Ltd (ASX: ISD) share price has had a positive start and is up 1.5% to $1.08
But despite this gain, the media monitoring company's shares are still down a whopping 62% since the start of the year.
Why are its shares climbing higher today?
Today's gain appears to be a relief rally of sorts. Due to the abject performance of its content marketing business over the last 18 months, investors have become accustomed to iSentia downgrading its guidance.
Thankfully this hasn't been the case today at its annual general meeting. Management took this opportunity to reaffirm its full-year guidance revenue between $133 million and $138 million and EBITDA in the range of $32 million to $36 million.
This compares to revenue of $155.1 million and EBITDA of $41 million in FY 2017.
Further to this, management has confirmed that its ANZ segment has seen revenue stabilise and is reporting organic revenue growth in Asia again.
Finally, the company advised that it expects to complete the King Content exit by end calendar 2017. Shareholders will no doubt be relieved to see the back of the content marketing business after its disastrous acquisition.
Should you invest?
Based on its current share price and my estimate for 10 cents of earnings per share in FY 2018, iSentia does look cheap at 10x forward earnings.
This could make it a great option for investors if the company does return to growth in FY 2019.
However, the company has been experiencing high levels of churn due to having to pass on increased copyright costs. If things don't improve in this regard in the near future then it will be increasingly harder for the company to return to meaningful growth.
In light of this, I would suggest investors wait until there is a further update on its business performance next year. In the meantime I would sooner invest in fellow software-as-a-service companies such as Altium Limited (ASX: ALU) or Aconex Ltd (ASX: ACX).
