We came across a bullish thesis on Thryv Holdings, Inc. (THRY) on Substack by Unconventional Value. In this article, we will summarize the bulls’ thesis on THRY. Thryv Holdings, Inc. (THRY)’s share was trading at $11.44 as of April 15th. THRY’s trailing and forward P/E were 15.31 and 13 respectively according to Yahoo Finance.
Rawpixel.com/Shutterstock.com
Thryv is entering a defining phase of its transformation from a legacy Yellow Pages operator into a scalable SaaS platform built for small businesses. Historically weighed down by its declining yet cash-generative Marketing Services segment, the investment narrative has long been overlooked. Now, the thesis is sharpening: a maturing multi-product SaaS suite, strong upsell motion, and depressed valuation are converging just as performance metrics begin to reflect real traction. Thryv’s shift from a single-product CRM offering to a modular, freemium-driven platform has removed onboarding friction and expanded customer value. In 2024 alone, Thryv added more net new SaaS clients than in the past six years combined, with multi-product adoption soaring—from 1,000 to nearly 14,000 clients year-over-year. This client cohort is driving higher margins, with seasoned net dollar retention nearing 97%, gross margins expanding by 10 points in six months, and growing EBITDA margins. The strategy of migrating legacy customers through its Marketing Center has smoothed the transition while positioning Thryv to decommission legacy systems, delivering both growth and long-term cost leverage. The acquisition of Keap supercharges this momentum by adding $50 million in cross-sell opportunities and enhancing lead automation. Meanwhile, Command Center’s base of over 50,000 free users offers a substantial funnel for future monetization, reinforcing visibility into long-term growth.
Despite these positive developments, Thryv trades at its lowest SaaS-only revenue and gross profit multiples, offering a substantial upside against a conservative DCF. Yet some investor concerns linger, especially around churn and sales productivity. A recent migration of 46,000 legacy subscribers retained 38,000—an impressive feat—but core sales efforts showed a net subscriber loss when excluding the migration cohort. However, management has intentionally shifted its focus to larger, multi-location accounts, doubling their penetration in 2024 and laying the groundwork for a future pivot back to broader acquisition. Under the direction of CEO Joe Walsh, Thryv has followed a Hubspot-inspired playbook, building a platform for businesses just below the Hubspot tier. Walsh, the company’s largest shareholder, maintains that execution—not macro conditions—drives results, and performance has validated that belief. With high-margin print revenues lasting until 2030 and Marketing Services winding down by 2028, Thryv is on track to become a pure SaaS company with better margins, stronger growth, and a more deserving valuation multiple. The company is poised to return to consolidated growth by 2027, and its SaaS business is projected to deliver a 17% revenue CAGR with free cash flow equal to ~80% of the current enterprise value over six years. The disconnect between bearish sentiment and improving fundamentals creates a deeply asymmetric risk/reward setup.
Thryv Holdings, Inc. (THRY) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 23 hedge fund portfolios held THRY at the end of the fourth quarter which was 18 in the previous quarter. While we acknowledge the risk and potential of THRY as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than THRY but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article was originally published at Insider Monkey.