BusinessWeek recently ranked Applix (NASDAQ:APLX) No. 6 on its 2007 "Hot Growth" Company list. It's easy to see why, when in 2006 the company posted 41% total revenue growth and 54% license growth. The company is also on the radar of the Motley Fool CAPS community, which has given the company a nice five-star rating.

Applix develops business performance management (BPM) software that helps companies analyze huge amounts of data. Its customers include Verizon (NYSE:VZ), GM (NYSE:GM), and Exxon (NYSE:XOM).

CAPS' take
CAPS member StocksInvestor is a bull on Applix and has this to say: "The ability to have different perspectives on information and analyze it to make quick decisions is critical in today's business environment. [Applix] operates in the mid-market and hence does not compete directly with big players like Oracle (NASDAQ:ORCL)."

Or there is this from CAPS member zversyp: "I think this company is a pioneer, providing a service that a lot of businesses are only now realizing that they need. Applix has a lot of room to grow here in the states, and a lot more room in China."

My take
With Applix's software, companies get more visibility about their operations and help with planning, budgeting, forecasting, and consolidations. The technology is also affordable and fairly easy to implement.

As a result, Applix's new product line is getting lots of traction. In fiscal Q1, the company increased revenues 55% to $13.9 million and license revenues surged 60% to $7.11 million. The license revenue is critical because it should lead to ongoing maintenance and service fees.

For 2007, Applix forecasts revenue growth at 28% to 35%, which translates into a range of $67 million to $70 million. But this may be an understatement. Over the past year, the company has revved up its sales force and put more resources into partnerships.

Also keep in mind that Applix's industry has seen several M&A deals. In the past few months, Oracle spent $3.3 billion on Hyperion, and Business Objects (NASDAQ:BOBJ) bought Cartesis for $300 million.

Taking this all in, I think CAPS has made a good call. And so far this year, the stock is up about 50% to $16.37 and is trading about 4 times revenues. While this is not necessarily cheap for an enterprise software player, it is still reasonable when you look at the strong growth rate and the M&A activity.

Do you agree with our CAPS community? Make your voice heard and let us know.

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Fool contributor Tom Taulli, author of The Complete M&A Handbook, does not own shares of companies mentioned in this article. He is currently ranked 1,831 out of 30,414 in Motley Fool CAPS.