The ASX growth share Siteminder Ltd (ASX: SDR) is a leading contender for growth, in my view. The hotel software business continues to grow at a strong pace and this suggests an exciting future.
Siteminder provides software of the same name that helps hoteliers run operations, price rooms and sell accommodation to potential guests. It also offers Little Hotelier, an all-in-one hotel management software for small accommodation providers.
The company currently generates 140 million reservations worth more than A$85 billion in revenue for hotel customers each year, according to Siteminder.
Siteminder recently held its annual general meeting (AGM) on 28 October 2026, which outlined how the company plans to grow significantly.
Strong growth ahead
Siteminder said at its AGM that its smart platform is seeing ongoing adoption. The smart platform refers to a suite of revenue and distribution solutions.
'Dynamic revenue plus' extends Siteminder's role in pricing, distribution and revenue optimisation. Its next version, planned for January 2027, will bring advanced analytics, greater pricing automation and controls and personalised revenue coaching. Dynamic revenue plus customer billings more than doubled in the first quarter of FY27 compared to the last quarter of FY26.
Another element of the ASX growth share's strategy is its 'dynamic commerce engine', which will help hotels act on recommendations and optimise commercial settings beyond pricing.
Siteminder's addressable market exceeds one million hotel properties, and it continues to win market share. In FY26, it added another 5,900 net properties.
FY26 revenue equates to approximately 0.3% of booking value. If clients take on full product adoption and usage with its current experience, there's potential for that percentage of booking value to rise to 1.5%, approximately five times today's level.
Based on successful adoption and scaling of its smart platform and the individual modules, the company expects its annual recurring revenue (ARR) to grow at a compound annual growth rate (CAGR) in the mid-20% level between FY26 and FY30.
The operating leverage from this growth, combined with ongoing efficiency gains, is expected to drive the adjusted operating profit (EBITDA) margin to the "mid-20s" in FY30. That compares to a 10.6% margin in FY26, so there's significant expansion potential between now and FY30.
The ASX growth share looks undervalued to me
It's clear that the business is expecting good revenue and earnings growth between now and the end of the decade. I don't think the Siteminder share price reflects the business's potential.
AI software competition is a real risk and may partly explain the decline in Siteminder's share price of more than 50% over the past year. But I think the shares have been oversold, giving growth investors the chance to lock in good returns from here if the business executes on its plans.
Using the earnings projection on CMC Invest for FY28, Siteminder's share price is now valued at 34x FY28's projected profit, after the share price rose 18% on the day of the AGM update. If ARR does grow at a CAGR in the mid-20s, and net profit and cash flow grow even faster, then I think the valuation is significantly undervalued. It could continue to grow quickly in FY29, FY30 and beyond.
The post Why I think this ASX growth share is a wonderful buy today appeared first on The Motley Fool Australia.
Motley Fool contributor Tristan Harrison has positions in SiteMinder. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended SiteMinder. The Motley Fool Australia has positions in and has recommended SiteMinder. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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