Shares of infrastructure engineering software provider Bentley Systems (BSY) have jumped 59.2% in price year-to-date due to the uptrend in its subscription revenues and its increasing investment in growth initiatives. However, given the extent of the company’s indebtedness and high valuation multiples, will the stock be able to maintain its momentum? Let’s find out.Software development company Bentley Systems, Incorporated (BSY) in Exton, Pa., provides open modeling and open simulation applications and infrastructure engineering software solutions to engineers, architects, and others. Because going digital remains a priority for businesses, the increasing number of infrastructure engineering projects and the growing demand for software solutions have benefitted BSY significantly.
So far this year, the stock has surged 59.2% in price, driven primarily by the acquisition of Seequent and its strategic partnership with a leading government IT solutions provider.
However, BSY’s high long-term debt level could strain its balance sheet and restrict its cash flow in the near term. Although the company’s increasing pace of acquisitions and double-digit ARR growth have helped it improve its operating performance, the stock’s high valuation could make investors bearish.