$1.29
$5.75
bear $1.29
base $3.43
bull $5.75
margin of safety $1.90
market price* $9.41
What the business is. EverCommerce sells subscription software and integrated payment processing to small service businesses in three groups: EverPro for home-service trades (HVAC, plumbing, electrical, remodeling, security installers), EverHealth for medical and therapy practices, and EverWell for wellness businesses. It served more than 745,000 customers at the end of 2025. Most revenue is recurring monthly or annual subscriptions plus fees on payments it processes for those customers. The company was assembled from dozens of acquisitions between 2016 and 2021. Since then it has been pruning: it sold its fitness software in 2024 and its marketing technology business in 2025 for about $45 million, after writing down goodwill in both. It bought ZyraTalk, an AI virtual-assistant tool, for about $36 million in 2025. Revenue from the businesses it still owns was $535 million in 2023, $562 million in 2024 and $589 million in 2025. Growth has been about 5% a year, from more customers and price increases, and slowed to about 3% in the first half of 2026. How we measured its earning power. We start from reported operating cash flow and remove short-term swings in receivables, payables and deferred revenue. We then subtract stock-based pay ($28 million in 2025), bad-debt losses and the capital spending needed to keep the business running. For a software company that spending is mostly capitalized software development, which rose from $17 million in 2024 to $30 million in 2025 and is running at about the same pace in 2026. Amortization of acquired customer lists and technology ($54 million in 2025) is added back because it is not a cash cost. The fading value of those acquired assets is instead reflected in how long we expect the cash flow to last. Because the company carries debt, we value the business before interest and then subtract what it owes. On that basis, and after removing our estimate of the marketing technology business that was sold (it produced roughly $9-15 million a year before its sale), the business still owned generated about $79 million in 2023, $104 million in 2024 and $91 million in 2025. We use the middle figure, $91 million, as the normal level. That is about $0.51 per share on 179 million diluted shares. The first half of 2026 produced about $43 million on the same basis, a pace of roughly $86 million a year. Last year's cash flow fell about 12% even though revenue grew, mainly because software development spending jumped. So we do not assume the revenue growth turns into more cash. The debt. The company owes about $524 million on a term loan due July 2031, at a floating rate of SOFR plus 2.25%. That cost is close to our 6% discount rate, so we make no adjustment for it. It held $133 million of cash at June 30, 2026, of which we treat about $30 million as needed to run the business. Net debt is therefore about $420 million, or roughly $2.35 per share. Interest costs about $33 million a year, which every case below covers comfortably. Base case: about $3.43 per share. Cash flow starts around $86 million, the pace of the first half of 2026, and stays flat for fifteen years. We credit no growth, because 2025 showed revenue gains being absorbed by higher development spending. Keeping the level flat relies on a demonstrated fact: revenue from the businesses it still owns kept growing through 2025 while acquired customer relationships were amortizing, so sales and development spending, already charged in our figures, has been replacing lost customers. After year fifteen we fade cash flow to zero over another fifteen years. Small-business software can be displaced, and nothing we can point to guarantees these products last indefinitely. The business is worth about $1.03 billion, the company owes about $0.42 billion, and about $0.61 billion is left for shareholders. Bear case: about $1.29 per share. Cash flow starts at $82 million and falls 3% a year for a decade, then fades to zero over the next ten years. The named risks behind this case are: small-business customer churn; slowing growth already visible in 2026; falling supplier-rebate revenue, which the company ties to economic conditions; competition from AI-driven tools; and a record of acquisitions later sold at losses or written down. We also charge about $25 million for refinancing the 2031 loan at a higher spread, since leverage would be around seven times cash flow by then. The business is worth about $0.68 billion against roughly $0.45 billion of debt, leaving about $0.23 billion. Bull case: about $5.75 per share. Cash flow holds at the $91 million normal level and grows 3% a year for a decade. That is below the roughly 5% revenue growth the company has shown from customer additions and price increases, assuming its demonstrated pricing power continues. Cash flow then holds flat for ten more years and fades over the following fifteen. We do not count any benefit from the AI assistant products or from the new management team's stated goal of faster revenue growth, because neither has produced results yet. The business is worth about $1.45 billion against $0.42 billion of debt, leaving about $1.03 billion. What could make this wrong. On the upside: if the jump in software development spending proves temporary, or revenue growth returns to 5% or more with cash flow following, value would move toward the bull case. On the downside: the company's history of acquiring businesses and later selling them at a loss, and the debt, which is about 4.6 times current cash flow, mean mistakes fall heavily on shareholders. Share buybacks ($85 million in 2025) shrink the share count, but they are paid for with cash that is already counted in our figures. Margin-of-safety price. Given the debt, the thin margin between business value and debt in the bear case, and the history of acquisitions later written down, the margin of safety is wide. The margin-of-safety price is about $1.90 per share, roughly 45% below the base case. Items we could not fully reconcile. The company does not report the cash flow of the sold marketing technology business separately. Our adjustment for it uses that business's reported operating profit before depreciation and impairment charges, so the 2023 to 2025 figures for the businesses still owned are estimates within a few million dollars.