WalkMe Ltd. (WKME) | Investment Case

1. Company Snapshot

1.a. Company Description

WalkMe Ltd.provides cloud-based digital adoption platform in the United States and internationally.Its digital adoption platform enables organizations to measure, drive, and act to maximize the impact of their digital transformation and accelerate the return on their software investment.

The company was formerly known as Make Tutorial Ltd.and changed its name to WalkMe Ltd.in March 2012.

WalkMe Ltd.was incorporated in 2011 and is headquartered in Tel Aviv-Yafo, Israel.

Show Full description

1.b. Last Insights on WKME

Key drivers behind WalkMe Ltd.'s recent developments include the company's strong Q2 2024 financial results, announced on August 1, 2024, which showcased its growth and resilience. The acquisition by SAP SE, completed on September 12, 2024, is expected to enhance SAP's copilot Joule with WalkMe's AI capabilities. Additionally, WalkMe has been doubling down on AI innovation, releasing enhancements to its award-winning copilot, WalkMe X, which has received four industry awards for artificial intelligence.

1.c. Company Highlights

Last Price	13.96
Change Percentage	0.07%
Open	13.96
Previous Close	13.95
Market Cap ( Millions)	1311
Volume	1097781
Year High	14.09
Year Low	7.6
M A 50	13.87
M A 200	10.79

FCF Yield	0.88%
Dividend Yield	0.00%
ROE	-23.00%
Debt / Equity	4.93%
Net Debt / EBIDTA	277.26%
Price To Book	4.77
Price Earnings Ratio	-20.99
Price To FCF	114.14
Price To sales	4.91
EV / EBITDA	-19.34

2. Transcript Summary

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3. NewsRoom

ABeam Consulting Partners with WalkMe to Enhance Enterprise Management Services in Southeast Asia

Apr -11

Source: businesswire.com

Category Creator WalkMe Recognized As The “AI-Powered DAP for the Enterprise” In Industry Analyst Report

Nov -26

Source: globenewswire.com

SAP Completes Acquisition of WalkMe

Sep -12

Source:

WalkMe Doubles Down on AI Innovation, Releases Enhancements to Award-Winning Copilot, WalkMe(X)

Aug -19

Source: globenewswire.com

WalkMe Ltd. Announces Second Quarter 2024 Financial Results

Aug -01

Source: globenewswire.com

Digital Adoption Professionals Emerge as Key Players in AI Transformation, New WalkMe Survey Reveals

Jul -25

Source: globenewswire.com

WalkMe Celebrates Winners of Annual Realizer Awards

Jul -02

Source: globenewswire.com

WalkMe Ltd. (WKME) Hit a 52 Week High, Can the Run Continue?

Jun -06

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.14%)

6. Segments

Cloud-based Digital Adoption Platform Subscription

Expected Growth: 8%

WalkMe's Cloud-based Digital Adoption Platform Subscription growth is driven by increasing demand for digital transformation, need for improved user experience, and rising adoption of cloud-based solutions. Additionally, the growing complexity of software applications, increasing need for real-time guidance, and expanding use cases across industries contribute to the 8% growth.

Cloud-based Digital Adoption Platform Professional Services

Expected Growth: 10%

WalkMe's Cloud-based Digital Adoption Platform Professional Services growth is driven by increasing demand for digital transformation, need for enhanced user experience, and rising adoption of cloud-based solutions. Additionally, the growing requirement for remote workforce enablement, improved employee productivity, and reduced training costs also contribute to the 10% growth.

7. Detailed Products

WalkMe Digital Adoption Platform (DAP)

A cloud-based platform that provides step-by-step guidance and real-time support to users within any software application or website.

WalkMe Analytics

A data analytics tool that provides insights into user behavior, helping organizations optimize their software adoption and user experience.

WalkMe Automation

A tool that automates repetitive tasks and workflows, freeing up users to focus on higher-value activities.

WalkMe Integrations

Pre-built integrations with popular software applications, enabling seamless interactions and workflows.

WalkMe Mobile

A mobile app that provides users with on-the-go access to WalkMe's guidance and support features.

8. WalkMe Ltd.'s Porter Forces

Forces Ranking

Threat Of Substitutes

WalkMe Ltd. has a medium threat of substitutes due to the availability of alternative digital adoption platforms. However, the company's strong brand recognition and customer loyalty mitigate this threat to some extent.

Bargaining Power Of Customers

WalkMe Ltd. has a low bargaining power of customers due to its strong market position and the lack of significant competitors. This allows the company to maintain its pricing power and negotiate favorable terms with its customers.

Bargaining Power Of Suppliers

WalkMe Ltd. has a low bargaining power of suppliers due to its strong relationships with its suppliers and the lack of significant supplier concentration. This allows the company to negotiate favorable terms and maintain a stable supply chain.

Threat Of New Entrants

WalkMe Ltd. faces a high threat of new entrants due to the relatively low barriers to entry in the digital adoption platform market. New entrants can easily replicate WalkMe's technology and business model, posing a significant threat to the company's market share.

Intensity Of Rivalry

WalkMe Ltd. operates in a moderately competitive market, with several established players competing for market share. However, the company's strong brand recognition and customer loyalty help to mitigate the intensity of rivalry.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	4.70%
Debt Cost	3.95%
Equity Weight	95.30%
Equity Cost	3.46%
WACC	3.49%
Leverage	4.93%

11. Quality Control: WalkMe Ltd. passed 7 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Accesso Technology Group

A-Score: 3.7/10

Value: 6.6

Growth: 2.8

Quality: 7.1

Yield: 0.0

Momentum: 2.0

Volatility: 3.7

1-Year Total Return ->

Riskified

A-Score: 3.7/10

Value: 6.1

Growth: 5.6

Quality: 3.2

Yield: 0.0

Momentum: 5.0

Volatility: 2.3

1-Year Total Return ->

WalkMe

A-Score: 3.1/10

Value: 4.2

Growth: 6.3

Quality: 3.5

Yield: 0.0

Momentum: 4.0

Volatility: 0.7

1-Year Total Return ->

Big Technologies

A-Score: 3.0/10

Value: 6.0

Growth: 6.6

Quality: 3.9

Yield: 0.0

Momentum: 0.5

Volatility: 1.0

1-Year Total Return ->

Marti Technologies

A-Score: 2.9/10

Value: 8.2

Growth: 0.6

Quality: 5.2

Yield: 0.0

Momentum: 3.5

Volatility: 0.0

1-Year Total Return ->

VTEX

A-Score: 2.8/10

Value: 1.5

Growth: 7.3

Quality: 6.5

Yield: 0.0

Momentum: 0.5

Volatility: 1.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-2.55%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

3.49%

WalkMe Ltd. - IL0011765851

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on WKME

1.c. Company Highlights

Average Quality

Average Yield

Medium Volatility

Earnings Beats

Lower Quality

More Volatile

Strong Momentum

Revenues Miss

Stable Momentum

Average Growth

2. Transcript Summary

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.14%)

6. Segments

Cloud-based Digital Adoption Platform Subscription

Expected Growth: 8%

Cloud-based Digital Adoption Platform Professional Services

Expected Growth: 10%

7. Detailed Products

WalkMe Digital Adoption Platform (DAP)

WalkMe Analytics

WalkMe Automation

WalkMe Integrations

WalkMe Mobile

8. WalkMe Ltd.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: WalkMe Ltd. passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

13.96$

Current Price

13.96$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA