20% CAGR company with 0 debt and >22% FCF margin

With recent accelerated selling pressure on SaaS companies, I found the French company Planisware ($PLNW). They are active in adaptive project management software solutions. PLNW sells to various industries. They adapt the software solutions to the customer’s needs and it integrates into the workflow across departments. The enterprise solution is for >10.000 employees, while the Orchestra solution targets medium-sized businesses (500+). **\~90% of the revenue is recurring**. 10% is licenses for on-premise solutions. The Aerospace and Defense industry requires software to run in-house. It is a small but increasing market. Competitor Planview pushes customers to cloud solutions, losing the license deals. **Planisware will become the only player in this niche.** The company spun-off in 1996 but IPO’ed almost 2 years ago. There aren’t many financials to go on. Personally, I like to see improvements in margins. The 4 available years show maintenance of gross (\~69%) and operating margins (\~27%). The balance sheet is healthy. It has no debt, lots of cash. A typical asset-light company. There is one item that caught my eye, contract liabilities, which is deferred revenue due to multiyear contracts. The cash flows look healthy with FCF margins around 22%. Since the company owns the technical stack, capital expenditures are mainly the purchase of servers. They rent the datacenter space and outsource security. **Moat** The PM software industry experiences a certain stickiness. Since Planisware is an all-in-one solution across multiple departments and adjusted to the customer’s needs, they have a stickier product.  The expertise comes from working with targeted industries directly. Learning what the workflow is etc. While competitors as Asana and Monday.com offer generic solutions to customers of all sizes. When you look at the net retention rate reported by the industry, Planisware’s customers stay around more. |Company|Net Retention Rate| |:-|:-| |Planisware|121%| |Asana|97%| |Monday.com|112%| |Planview|(Private)| |Smartsheet\*|116%| *\*Smartsheet was taken private in January 2025. NRR is from the last report over FY2024.* **Growth** The market is expected to grow at between 11-13% CAGR till the end of the decade. Planisware grew 20% CAGR since 2020. They expect to continue to grow closer to 20% CAGR in the years to come. Management want to realize this by upselling products as technical support and cross-selling to include more departments. Due to high inflation in the last few years, renewed contracts have a clause that allows for price increases. PLNW limits the price increases to the inflation rate. Management sees this as the most sustainable solution. In their vision, customers are long-term partners. **Risks** Planisware owns the technical stack and are more exposed to cybersecurity. Lay-offs aren’t mentioned by the company. They state that the customers use planisware to identify cost-cutting. It isn’t clear if the contracts are following pay-per-seat model. But companies tend to grow the workforce. Even with temporary lay-offs, it shouldn’t be a problem. The AI risk? The threat isn’t coming from vibecoders building the same software as Planisware. Still need people who think of architecture, innovate and design. The only risk is permanent lay-offs due to AI successfully replacing the workforce. We will have bigger problems when no one works anymore. **Valuation** Based on competitor analysis and paying for what you get, I think a price of €14-15 is justified. The price per revenue and FCF is high compared to competitors. The expected growth pushes the P/E up as well. The entry price of €15 would be around 20x earnings. What do you think guys? P.s.: If you are interested in more details about Planisware, check out my deep-dive here: [https://read.europeanvalueinsights.com/p/planisware-plnw-deep-dive](https://read.europeanvalueinsights.com/p/planisware-plnw-deep-dive)