Osirium is building on the success of its privileged task automation technology with the launch of a new product, Opus, to provide privileged IT process automation. Opus enables the automation of more complicated processes that require privileged access to multiple systems, and provides for human interaction where choices and exceptions arise. Opus will be sold as a separate module and management expects it to have a growing and material impact on its financial performance.
Osirium’s privilege task automation tool (PTM) has been highlighted by industry analysts as differentiating Osirium from its PAM software competitors. Gartner recently included automation of privileged processes as one of the four pillars required to build a mature PAM practice within a business. Building on the success of its PTM module, Osirium has launched Opus to securely automate privileged IT processes.
Opus will enable multiple tasks requiring privileged access to be combined to create secure automated processes. This should improve the efficiency and accuracy of IT operations and free up IT service desks to perform more valuable work. As Opus can access credentials from third-party vault providers, it widens Osirium’s addressable market significantly. Management expects Opus will contribute to a growing and material impact on the company’s financial performance. We make no changes to estimates, pending results on 8 May.
As an early-stage company showing revenue growth ahead of its peer group, Osirium is trading at a premium to peers on an EV/sales basis. We have performed a reverse DCF to analyse the assumptions factored into the current share price, using a WACC of 11% and a terminal growth rate of 3%. We estimate that the share price is discounting average annual bookings growth of 23% for FY21–27, break-even EBITDA in FY23, average EBITDA margins of 8.7% for FY21–27 and a terminal EBITDA margin of 35%. In our view, bookings growth will be the key driver of share price performance.