Vertex: Solid Recurring Revenue At Great Multiples

Vertex Software remains deeply undervalued despite a strong Q2 beat and raised guidance, trading near multi-year lows. VERX’s specialized tax automation niche is resilient to AI disruption, with robust 105% net retention and 95% gross retention rates. A recent restructuring targets $60-70 million in annual opex savings, enhancing profitability and supporting the investment thesis.

A change is sweeping over the markets as we move through the Q2 earnings season, and the clearest outcome is that we're seeing capital shift back into the lagging software stocks that were early victims of