SolarWinds Corporation (SWI) | Investment Case

1. Company Snapshot

1.a. Company Description

SolarWinds Corporation provides information technology (IT) management software products in the United States and internationally.The company offers a portfolio of solutions to technology professionals for monitoring, managing, and optimizing networks, systems, desktops, applications, storage, databases, website infrastructures, and IT service desks.It provides a suite of network management software that offers real-time visibility into network utilization and bandwidth, as well as the ability to detect, diagnose, and resolve network performance problems; and a suite of infrastructure management products, which monitor and analyze the performance of applications and their supporting infrastructure, including websites, servers, physical, virtual and cloud infrastructure, storage, and databases.

The company also provides a suite of application performance management software that enable visibility into log data, cloud infrastructure metrics, applications, tracing, and web performance management; and service management software that offers ITIL-compliant service desk solutions for various companies.It markets and sells its products directly to network and systems engineers, database administrators, storage administrators, DevOps, SecOps, and service desk professionals.The company was formerly known as SolarWinds Parent, Inc.

and changed its name to SolarWinds Corporation in May 2018.SolarWinds Corporation was founded in 1999 and is headquartered in Austin, Texas.

Show Full description

1.b. Last Insights on SWI

Here is a 90-word analysis of the positive drivers behind SolarWinds Corporation's recent stock performance: SolarWinds' strong Q4 earnings release, where it beat estimates with $0.51 per share, has driven optimism. The company's successful migration to a subscription-based model and consolidation strategy have led to larger deal sizes and accelerated ARR growth. Improved macroeconomic conditions, reduced inflation, and interest rate cuts have created a favorable demand landscape. Additionally, the company's earnings surprise history and solid company-level progress have contributed to its positive outlook.

1.c. Company Highlights

Last Price	18.49
Change Percentage	0.00%
Open	18.48
Previous Close	18.49
Market Cap ( Millions)	3201
Volume	4299213
Year High	18.55
Year Low	10.14
M A 50	18.3
M A 200	14.41

FCF Yield	4.53%
Dividend Yield	0.00%
ROE	7.10%
Debt / Equity	4.41%
Net Debt / EBIDTA	-89.44%
Price To Book	2.26
Price Earnings Ratio	32.83
Price To FCF	22.06
Price To sales	5.3
EV / EBITDA	14.16

2. Transcript Summary

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3. NewsRoom

US SEC dismisses case against SolarWinds, top security officer

Nov -20

Source: reuters.com

CORRECTING and REPLACING SolarWinds Launches Autonomous Operational Resilience Tour

Nov -07

Source: businesswire.com

SolarWinds Launches Autonomous Operational Resilience Tour

Nov -06

Source: businesswire.com

New SolarWinds Report: Gen AI Significantly Drops Incident Response Time for ITSM Teams

Oct -21

Source: businesswire.com

SolarWinds Launches AI Agent and Expands AI Capabilities to Advance Autonomous Operational Resilience

Oct -08

Source: businesswire.com

Fragile to Agile: New SolarWinds Study Finds IT Resilience Requires a Holistic Approach

Jul -29

Source: businesswire.com

SolarWinds Recognized in 2025 Gartner® Magic Quadrant™ for Observability Platforms

Jul -10

Source: businesswire.com

US SEC, SolarWinds reach preliminary deal to end breach lawsuit

Jul -02

Source: reuters.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.73%)

6. Segments

Maintenance

Expected Growth: 3.5%

SolarWinds' Maintenance segment growth is driven by increasing adoption of IT infrastructure management solutions, rising demand for cloud-based services, and growing need for cybersecurity and compliance. Additionally, the company's strong brand reputation, expanding partner network, and strategic acquisitions contribute to its 3.5% growth rate.

Subscription

Expected Growth: 4.5%

SolarWinds' subscription growth of 4.5% is driven by increasing adoption of cloud-based IT management solutions, expansion into new markets, and strong demand for cybersecurity and observability products. Additionally, the company's strategic acquisitions and partnerships have enhanced its product offerings, leading to higher customer retention and upselling opportunities.

License

Expected Growth: 2.5%

The 2.5% growth of the License from SolarWinds Corporation is driven by increasing demand for IT infrastructure management, growing adoption of cloud-based services, and rising need for cybersecurity solutions. Additionally, the company's expanding product portfolio, strategic acquisitions, and strong sales execution also contribute to this growth.

7. Detailed Products

Network Performance Monitor (NPM)

A network monitoring tool that provides real-time monitoring, automated network mapping, and network performance analysis.

Server & Application Monitor (SAM)

A server and application monitoring tool that provides real-time monitoring, automated application discovery, and performance analysis.

Database Performance Analyzer (DPA)

A database performance monitoring tool that provides real-time monitoring, automated database analysis, and performance optimization.

Virtualization Manager (VMAN)

A virtualization monitoring tool that provides real-time monitoring, automated virtual machine discovery, and performance analysis.

Storage Resource Monitor (SRM)

A storage monitoring tool that provides real-time monitoring, automated storage analysis, and performance optimization.

Log & Event Manager (LEM)

A log and event management tool that provides real-time log monitoring, automated log analysis, and security threat detection.

Papertrail

A cloud-based log management tool that provides real-time log monitoring, automated log analysis, and security threat detection.

Pingdom

A digital experience monitoring tool that provides real-time monitoring, automated website analysis, and performance optimization.

8. SolarWinds Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

SolarWinds Corporation has a medium threat of substitutes due to the presence of alternative network management solutions from competitors like Cisco Systems, IBM, and CA Technologies.

Bargaining Power Of Customers

SolarWinds Corporation has a low bargaining power of customers due to its strong brand presence and diversified customer base, making it difficult for customers to negotiate prices.

Bargaining Power Of Suppliers

SolarWinds Corporation has a low bargaining power of suppliers due to its significant scale and negotiating power, allowing it to maintain favorable supply chain agreements.

Threat Of New Entrants

SolarWinds Corporation has a low threat of new entrants due to the high barriers to entry in the network management software market, including significant research and development investments.

Intensity Of Rivalry

SolarWinds Corporation operates in a highly competitive market with intense rivalry among established players, driving innovation and pricing pressures.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	45.80%
Debt Cost	3.95%
Equity Weight	54.20%
Equity Cost	8.69%
WACC	6.52%
Leverage	84.48%

11. Quality Control: SolarWinds Corporation passed 1 out of 9 key points

Strong Liquidity

Low Deb

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

SolarWinds

A-Score: 5.6/10

Value: 3.9

Growth: 3.8

Quality: 8.5

Yield: 3.0

Momentum: 9.0

Volatility: 5.3

1-Year Total Return ->

A10 Networks

A-Score: 5.4/10

Value: 2.5

Growth: 6.3

Quality: 7.3

Yield: 2.0

Momentum: 7.5

Volatility: 6.7

1-Year Total Return ->

PaySign

A-Score: 4.9/10

Value: 3.4

Growth: 6.4

Quality: 7.9

Yield: 0.0

Momentum: 9.5

Volatility: 2.0

1-Year Total Return ->

Payoneer Global

A-Score: 4.6/10

Value: 4.8

Growth: 9.0

Quality: 7.4

Yield: 0.0

Momentum: 2.0

Volatility: 4.3

1-Year Total Return ->

Int'l Money Express

A-Score: 4.3/10

Value: 7.4

Growth: 7.7

Quality: 6.8

Yield: 0.0

Momentum: 2.0

Volatility: 2.0

1-Year Total Return ->

Sterling Check

A-Score: 3.4/10

Value: 3.2

Growth: 7.1

Quality: 2.7

Yield: 0.0

Momentum: 5.0

Volatility: 2.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-1.31%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

6.52%

SolarWinds Corporation - US83417Q2049

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on SWI

1.c. Company Highlights

Higher Yield

Lower Growth

Stable Momentum

Earnings Beats

Revenues Beats

Medium Volatility

Strong Momentum

Earnings Miss

Revenues Miss

Less Volatile

Fairly Valued

Better Quality

2. Transcript Summary

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.73%)

6. Segments

Maintenance

Expected Growth: 3.5%

Subscription

Expected Growth: 4.5%

License

Expected Growth: 2.5%

7. Detailed Products

Network Performance Monitor (NPM)

Server & Application Monitor (SAM)

Database Performance Analyzer (DPA)

Virtualization Manager (VMAN)

Storage Resource Monitor (SRM)

Log & Event Manager (LEM)

Papertrail

Pingdom

8. SolarWinds Corporation'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: SolarWinds Corporation passed 1 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

18.49$

Current Price

18.49$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA