Over 400 million small and medium-sized businesses operate globally. Each day, these companies interact with millions of customers.

This is why these businesses, especially service-based ones, require access to software tools that allow them to manage the day-to-day aspects of their operations ranging from payments and invoice processing to customer engagement.

EverCommerce (EVCM) is a company that specializes in providing software solutions to SMBs across the globe. It currently services over 725,000 companies.

In the past three years, the company has averaged returns of 43%, delivering a Uniform ROA of 41% and 15% Uniform asset growth last year.

Despite this, the company currently trades at a below-average Uniform P/E of 22.3x, with the market expecting its returns to drop dramatically in the next five years.

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There are over 400 million small and medium-sized businesses (“SMBs”) operating across the globe. And each day, these firms interact with millions of customers that rely on their products or services. 

Due to this, these businesses—especially those that are service-based—need access to software tools that enable them to seamlessly manage their day-to-day operations from payments and invoice processing to customer engagement.

That’s where EverCommerce (EVCM) comes in.

Founded in 2016, and headquartered in Denver, Colorado, the company specializes in offering custom and integrated software as a service (“SaaS”) solutions to SMBs across the globe.

The firm services over 725,000 customers globally and offers solutions in three major segments: Home & Field Service, Health, and Wellness. 

EverPro, its dedicated solution for Home & Field Service, offers business management and customer engagement solutions ranging from lead qualification, appointments, billing and payment processing, customer satisfaction surveying, and SMS & email follow-ups.

Meanwhile, its EverHealth segment provides solutions for both practice management and patient engagement.

Lastly, its EverWell solutions provides Wellness businesses tools for lead management, point-of-sale, inventory management, staff & member mobile apps, client & member marketing solutions, and others.

The company recently announced the acquisition of an AI agentic platform that would allow it to deploy AI-powered features to its software offerings. The firm also divested its marketing technology segment to enable it to focus on its core offerings. 

Since 2022, the company has delivered an average Uniform return on assets (“ROA”) of 43%. Last year, it generated a Uniform ROA of 41% and delivered a 15% Uniform asset growth.

Yet despite EverCommerce’s steady performance in recent years, it currently trades at a Uniform P/E of 22.3x, below corporate averages.

Given these valuations,  the market expects the company’s returns to dip dramatically in the next few years.

We can see the market’s expectations through our Embedded Expectations Analysis (“EEA”) framework.

The EEA starts by looking at a company’s current stock price. From there, we can calculate what the market expects from the company’s future cash flows. We then compare that with our own cash-flow projections.

In short, it tells us how well a company has to perform in the future to be worth what the market is paying for it today.

At current prices, investors expect EverCommerce’s Uniform ROA to drop to 17% by 2029.