The Bravura Solutions share price is up 18% in a month: Is it too late to invest?

The Bravura Solutions Ltd (ASX:BVS) share price has been on fire over the last few weeks. Is it too late to invest?

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Over the last 30 days the Bravura Solutions Ltd (ASX: BVS) share price has been one of the best performers on the S&P/ASX 200 index.

During this time the shares of the provider of software products and services to clients operating in the wealth management and funds administration industries have recorded an impressive gain of 18%.

As a comparison, over the same period the benchmark index has fallen around 0.7%.

Why is the Bravura Solutions share price on fire?

Investors were fighting to get hold of Bravura Solutions' shares late last month following the release of a trading update at its annual general meeting.

That update advised that the company is on track to achieve its FY 2020 guidance of mid-teen net profit growth. This went down well with the market, which previously appeared a touch concerned that it was underperforming this year.

In addition to this, management revealed that its recent acquisitions are expected to contribute another $3 million in net profit. 

I estimate that this guidance implies a net profit of around $41 million in FY 2020, up from $32.8 million a year earlier.

Is the Bravura Solutions share price in the buy zone still?

I don't believe it is too late to invest and still see a lot of long-term value in Bravura Solutions' shares at the current level.

Based on approximately 244 million shares outstanding and its share price of $5.03, Bravura Solutions currently has a market capitalisation ~$1.25 billion.

This means its shares are changing hands at approximately 30x estimated forward year earnings. I feel this is reasonable given its strong long-term growth potential and compared to other tech valuations.

As a comparison, fellow tech shares Altium Limited (ASX: ALU) and Appen Ltd (ASX: APX) are trading at 51x and 46x estimated forward earnings.

Overall, I continue to believe it would be a great buy and hold option for investors to consider today.

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Bravura Solutions Ltd. The Motley Fool Australia owns shares of Altium and Appen Ltd. The Motley Fool Australia has recommended Bravura Solutions Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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