Comments on: RealPage gets diluted on a deal http://blogs.451research.com/techdeals/investment-banking/realpage-gets-diluted-on-a-deal/ The 451 Take on Tech M&A Sun, 20 Mar 2016 14:04:45 +0000 hourly 1 https://wordpress.org/?v=4.9.26 By: Brenon Daly http://blogs.451research.com/techdeals/investment-banking/realpage-gets-diluted-on-a-deal/comment-page-1/#comment-13891 Thu, 25 Aug 2011 17:56:30 +0000 http://blogs.451research.com/techdeals/?p=1384#comment-13891 Hi Bill — always good to hear from you. And since you’ve been around the market for a few years yourself, you’ve seen a fair bit of mispriced equity in your time. (Maybe you even contributed to some of that mispricing in your prior life???)

But specific on RP: I’m not smart enough to know whether the co is overvalued/undervalued. I’m just explaining why it dropped on a day when the market rose 4%. You can tell me it’s teetering, that it doesn’t deserve its multiple and so on. But that was as true Friday (with shares at $23 and change) as it was Monday (with shares at $21 and change.) All I did was highlight the reason for the move, not whether it ‘should’ move.

]]> By: Bill Burnham http://blogs.451research.com/techdeals/investment-banking/realpage-gets-diluted-on-a-deal/comment-page-1/#comment-13888 Thu, 25 Aug 2011 14:53:15 +0000 http://blogs.451research.com/techdeals/?p=1384#comment-13888 I have to disagree w/you Brandon. RealPage is one of the more egregiously overvalued companies in the software sector. It’s a roll-up trading at over 5X sales and 52X 2010 earnings (and that’s even after the most decline!). When you reduce profit growth expectations even a little bit for a company trading at those nosebleed levels the stock will necessarily take a big hit.

To me the real wonder is why it trades at the level it does given the much lower organic growth numbers and lack of internal innovation. You can only fool the market for so long.

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