Australian software company IRESS Ltd (ASX: IRE) has captured 60% of the software market that services financial advisory and superannuation firms. It seems to be hugely benefiting in the post-Royal Commission environment as these institutions seek to adapt.
At the beginning of the year, the IRESS share price was trading at $10.80. So far in 2019, the IRESS share price has grown a sweet 18.8% for a $13.30 close yesterday.
Why would I invest in IRESS shares?
IRESS specialises in developing software services for client relationship management all the way through to portfolio tracking for financial advisory and superannuation firms.
The company is investing heavily in building out machine learning and artificial intelligence capabilities to create automated advice solutions. IRESS now has half of its 1,800-technology staff allocated to these projects, a move that aims to serve the under-advised communities in Australia.
Furthermore, CEO Andrew Walsh has announced the company is preparing for a future where screens will be replaced by voice-based interactions. This will also be a point of emphasis as IRESS prepares to integrate these functionalities in delivering software and enabling platforms. Ultimately, it demonstrates how the company is adapting to the market.
Foolish Takeaway
Back in February, IRESS reported solid annual results with group revenue up 8% to $464.6 million and profit up 10% to $137.7 million. This grew the company's EPS by 6% to $37.6 cents at December-end, pushing its P/E ratio to 34x. Furthermore, IRESS has consistently been improving its return on capital from 14% to 15% in the last three years which correlates with a 9% decrease in its debt-to-equity ratio to 49% over five years.
To add to this, analysts are confident. They predict that profits will increase by 19% in 2019 relative to the average 12% growth rate that IRESS has achieved in the last 5 years.
While it doesn't play in the same ballpark as our beloved WAAAX companies in delivering staggering investor returns, IRESS has delivered stable growth over the last few years and is poised to continue to do so in Australia's post-Royal Commission market.
