Solera (SLRA) Model

We built a Solera (SLRA) model.

• All TEK2day subscribers may view a PDF of our SLRA model HERE.

• Premium TEK2day subscribers may view the Excel version below the paywall.

  • We modeled revenues and related expenses through fiscal year 2027. We captured revenue and adjusted EBITDA by reportable segment. We also modeled cash flow over the same period.

  • Our model is not a pro forma model. It does not reflect a potential IPO.

• When private equity firms value a company, they allocate the most weight to trailing EBITDA as they define EBITDA. Public company investors are different in that they prefer cash flows to EBITDA when working through a valuation analysis.

  • For a low-to-mid single digit percentage organic revenue grower such as Solera where operating cash flow is only approximately 20% of adjusted EBITDA in a given year, I would not apply a generous Enterprise Value to Cash Flow multiple on SLRA shares. I say this knowing that the collective equity market has lost its mind when it comes to valuation. Everything looks expensive to me in this equity market. A massive haircut is long overdue.

  • I do prefer SLRA’s business to CCCS given that Solera has greater diversification in terms of its product portfolio and customers - including customer geographic diversification.