Asure Software extends shareholder rights plan

Published 16/04/2025, 21:12
Asure Software extends shareholder rights plan

Asure Software Inc . (NASDAQ:ASUR), a provider of cloud-based human capital management software solutions with a market capitalization of $247 million and impressive gross profit margins of 69%, announced on Monday an extension to its shareholder rights plan, pending stockholder approval. According to InvestingPro analysis, the company appears undervalued at its current price of $9.13. The company’s Board of Directors has approved the Fourth Amended and Restated Rights Agreement, with the new expiration date set for October 28, 2028, extending from the original date of October 28, 2025. This extension is contingent upon the majority vote at the Annual Meeting of Stockholders scheduled for June 2, 2025.

The rights agreement, which is not intended as an anti-takeover measure, aims to preserve the company’s federal net operating loss carryforwards, which amount to approximately $46.6 million and research and development credit carryforwards of roughly $3.6 million. The company maintains a strong balance sheet, with InvestingPro data showing more cash than debt, positioning it well for future growth.

In a separate development, Asure Software disclosed a change in their certifying accountant. Marcum LLP resigned following the acquisition of its attest business by CBIZ (NYSE:CBZ) CPAs P.C., which was then engaged as the company’s new independent registered public accounting firm. Marcum’s reports for the fiscal years ended December 31, 2024, and December 31, 2023, contained no adverse opinions, and no disagreements were reported during those periods or up to the resignation date.

This news is based on a press release statement and the full text of the Fourth Amended Rights Agreement is filed with the U.S. Securities and Exchange Commission. Analysts maintain a bullish outlook on ASUR, with targets ranging from $11 to $20 per share. For deeper insights into Asure Software’s financials and growth prospects, access the comprehensive Pro Research Report available on InvestingPro, which covers over 1,400 US stocks with expert analysis and actionable intelligence.

In other recent news, Asure Software reported its fourth-quarter earnings for 2024, revealing a significant miss on earnings per share (EPS) compared to analyst forecasts. The company posted an EPS of -$0.12, falling short of the expected $0.19, with revenue slightly below expectations at $30.79 million. Despite these results, Asure Software confirmed its EBITDA margin guidance for FY25 at 23%-24%. The company also secured a $60 million credit facility with MidCap Financial Trust, with an immediate $20 million in funding, and plans to use subsequent disbursements for acquisitions.

Analysts from Stifel and Needham maintained their Buy ratings on Asure Software, with price targets of $11.00 and $20.00, respectively, expressing confidence in the company’s growth trajectory. Stifel highlighted Asure’s ex-ERTC revenue growth, which increased 22% year-over-year, and Needham noted the company’s gross margin improvements. Asure’s recurring revenues grew by 15%, now accounting for 96% of total revenues, indicating strong sales momentum with a $79 million contracted backlog.

Asure Software also introduced several new products, including AssurePay and Luna, to enhance its offerings and drive future growth. Despite challenges such as the delayed acquisition and reduced revenue from certain services, the company remains optimistic about its strategic direction and growth opportunities.

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