A rare buying opportunity in 1 of Australia’s top shares?

In my view, Siteminder Ltd (ASX: SDR) is one of Australia’s top shares. It has excellent growth potential and every result has shown how effective the business is at capitalising on its opportunity.

Siteminder provides software to help hotels run their operations, analyse their performance and maximise their bookings and revenue.

The company reported its half-year result earlier this week and it included everything I wanted to see. Let’s run through some factors why I think it’s a fantastic business to buy today following a large decline during the past year, as shown on the chart below shows.

Great revenue potential

In the FY26 half-year result, total revenue increased by 25.5% to $131.1 million.

Perhaps more excitingly, annualised recurring revenue (ARR) grew 29.7% to $280.3 million, with subscription ARR climbing 18.4% to $168.6 million and transaction ARR growing 51.3% to $111.7 million. Net property additions came to 2,900 during the half, bringing the total to 53,000 – it continues to pursue larger hotel properties.

Siteminder reported that its average revenue per user (ARPU) increased 11.3% to $435 reflect smart platform initiatives and rising product adoption.

Its initiatives with the smart platform mean the business has the potential to extract more revenue from each hotel client, while unlocking more revenue for them.

‘Channels Plus’ aims to streamline distribution expansion and it was launched in FY25. In less than two years, 7,000 hoteliers and 47 distribution partners have signed up.

‘Dynamic Revenue Plus’ aims to help hoteliers make data-driven commercial decisions through proprietary analytics and artificial intelligence. More than 20,000 rooms are now under management. These efforts “represent a significant step forward” in the company’s ability to deliver “high-margin, AI-driven value” to subscribers.

The ‘Smart Distribution Program’ is designed to optimise the “synergies” between Siteminder’s hoteliers and global distribution partners.

Regarding AI agents and booking, Siteminder said:

As AI adoption accelerates across the travel ecosystem – including tools embedded in the Smart Platform – pricing sophistication, update frequency, and distribution intensity are increasing. In this environment, the cost of latency or error rises materially, reinforcing the need for deterministic, high-reliability execution infrastructure.

The emergence of AI agents further amplifies this dynamic: while they may influence discovery and booking decisions, they rely on trusted systems to execute transactions, synchronise pricing and inventory, and fulfil reservations across fragmented hotel and distribution platforms. This positions SiteMinder’s infrastructure as a foundational layer for AI-enabled commerce.

A targeted annual revenue growth rate of 30% makes this a top Australian share, in my view.

Rising profit margins

Rapid revenue growth alone makes this an incredibly attractive business and compelling investment.

As a software business, the company has pleasing operating leverage potential. In other words, costs don’t rise at the same pace as revenue growth. That translates into rising profit margins and accelerates the company’s intrinsic value.

There were a number margins in the result.

Specifically, the adjusted group gross profit margin increased 98 basis points (0.98%) year-over-year to 67.8%. Within that, the adjusted subscription margin increased 125 basis points (1.25%) to 86.7% through operating leverage and AI-driven efficiencies, and the adjusted transaction margin increased by 558 basis points (5.58%) to 40.1%, boosted by the smart platform.

Adjusted operating profit (EBITDA) grew by 132% to $12.3 million, while reported EBITDA grew $11.2 million to $11.5 million. The statutory net loss improved by $9.1 million to a loss of $3.9 million.

Profitability is rapidly improving at the business and I’m expecting its bottom line to significantly improve in the coming years.

Excellent value for one of Australia’s top shares

The business is clearly doing well, yet the Siteminder share price has sunk. At the time of writing, it has dropped more than 50% from 29 October 2025.

When a business falls that far, it’s a lot cheaper. Yet, the business is generating more revenue than ever and its operating profit margins are increasing.

I think it’s a strong buy today after falling so hard, with its price/earnings (P/E) ratio for its FY30 earnings – whatever that ends up being – is significantly lower. I think the market is dramatically undervalued this business.

The post A rare buying opportunity in 1 of Australia’s top shares? appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in SiteMinder. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended SiteMinder. The Motley Fool Australia has positions in and has recommended SiteMinder. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.