What does the Microsoft partnership mean for the LiveTiles (ASX:LVT) share price?

The LiveTiles (ASX:AMS) share price closed the week at $0.475, up over 15% post the announcement of its new partnership with Microsoft. So what does the partnership mean for LiveTiles, and why are investors looking so favourably at it?

What does LiveTiles do?

LiveTiles is a technology company focused on transformative enterprise solutions and intelligent design to change the way people interact with technology. LiveTiles provides business users and developers with the tools to create dashboards, employee portals, and corporate internets enhanced by artificial intelligence and analytics features.

Image: The LiveTiles ecosystem

Microsoft Partnership

Last week Jeff Teper (Corporate Vice President, Office 365, Microsoft) announced the introduction of ‘home sites’ to the Modern SharePoint Suite, and confirmed that pharmaceutical company Novartis will be an early adopter. In line with this announcement, LiveTiles announced that it has been chosen by Microsoft as a key global launch partner of ‘home sites.’

Karl Radenbach (CEO and Co-Founder, LiveTiles), recognised the important milestone by saying:

“This launch and new customer announcement have further strengthened the relationship between Microsoft and LiveTiles, and will drive even stronger joint sales and marketing activities to enterprise customers across the globe.

Investor Presentation Update

Apart from the Microsoft partnership, last week the company also gave an investor presentation update. The key takeaways was that its Annualised Recurring Revenue (ARR) is growing rapidly; in the past 12-months, this has more than tripled to $34.5 million. The average ARR per customer is also up 65% over the last 12 months, driven by a higher proportion of new enterprise customers, product cross-selling/bundling and increased penetration of existing customers.

Should you invest?

The company’s medium term goal is to grow ARR to at least $100 million by June 2021 through a range of organic growth drivers including a sales and marketing strategy targeting large enterprise, high-impact co-marketing initiatives with Microsoft, continued growth in distribution channels, and substantial expansion of cross-sell opportunity with existing customers. Many investors believe the company can do it, and are rushing to buy-in. Others are less optimistic and see significant counter-party risk (i.e. its business reliance on Microsoft). So should you invest?

The Strawman consensus valuation currently sees the stock as undervalued by 34%. Click the button below to see what the Strawman community is saying about this stock:

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