Is LogMeIn Overvalued?

LogMeIn Inc. (LOGM) generates most of its revenue from identity and access management services followed by collaboration services. Collaboration revenue grew at 36% p.a. while access management witnessed 27% p.a. growth in revenue during 2014-2016.

The company monetizes its products primarily through annual subscription. Customers of the company include SMBs, IT service providers and consumers. It is worth mentioning that the annual renewal rate stood at 75% in 2016. LogMeIn’s revenue is expected to reach $1 billion during 2017, thanks to the merger with Citrix’s GoTo business. The market seems quite excited about the company’s prospects as the share price more than doubled during the trailing 12 months.

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