Double-Take Software (NASDAQ:DBTK) helps companies recover from information technology (IT) meltdowns. Sarbanes-Oxley regulations and corporate America's growing reliance on IT have made this a juicy business, and the company continues to get its fair share.
Double-Take's fiscal first-quarter revenue surged 67% to $17.9 million, while license revenue rose 63% to $10.4 million. Last year's acquisition of the company's main European distributor, Sunbelt System Software, helped sweeten those results, as did its increased popularity among resellers such as Hewlett-Packard (NYSE:HPQ) and Dell (NASDAQ:DELL).
That revenue growth certainly makes GAAP profitability easier to achieve. The company posted Q1 net income of $2.9 million, or $0.13 per share, compared to a net loss of $1.3 million, or $0.44 per share, in the year-ago period
Management expects Q2 revenue of $19 million to $19.5 million, while the full-year revenue forecast calls for revenue of $78.5 million to $80.5 million. All together, the company is selling at roughly 3.75 times its full-year revenues.
Compared to other fast-growing enterprise security companies, Double-Take's valuation looks relatively cheap. A variety of M&A deals in the space should provide further support for Double-Take shares.
With the proceeds from its recent IPO, management can expand more aggressively into Europe and Asia. The company has also broadened its product line to cover more offerings from Microsoft (NASDAQ:MSFT). For now, it seems that the company's growth story is intact, and it's likely that more investors will take a piece of Double-Take.
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Fool contributor Tom Taulli, author of The Complete M&A Handbook, does not own shares mentioned in this article. He is currently ranked 1,784 out of 28,166 in CAPS.
