Thryv Holdings (THRY): Is the Undervaluation Discount Worth the Growth Gamble?

Thryv Holdings (NASDAQ: THRY) trades at $13.47, far below its estimated intrinsic value of $18.17, creating a compelling valuation gap. But the company faces headwinds: its revenue is projected to shrink by -0.8% next year, and it reported a net loss in Q1 2025. Is this a contrarian opportunity or a trap? Let's dissect the risks and rewards.

The Undervaluation Case: Why $18.17 vs. $13.47 Matters

The $4.70 gap between Thryv's current price and its $18.17 intrinsic value (per a two-stage DCF model) is eye-catching. This valuation assumes revenue grows to $894M by 2034 and net margins improve from -9% to 1%. While aggressive, these assumptions are grounded in Thryv's SaaS pivot:

• SaaS Dominance: SaaS revenue surged 50% YoY in Q1 2025, accounting for 61% of total revenue. Excluding the Keap acquisition, growth was 24%, signaling organic strength.
• Customer Momentum: SaaS clients rose 59% YoY to 111,000, with a 103% net revenue retention rate—proof of sticky customer relationships and cross-selling success.

The Earnings Power Value (EPV) model goes further, assigning a $35.48 fair value by valuing current earnings ($149M) without growth. Even the conservative weighted average of all models ($14.34) suggests Thryv is undervalued.

Growth Concerns: Can Thryv Turn the Tide?

The downside is clear: consolidated revenue fell 22% YoY in Q1 2025, dragged down by a 56% drop in marketing services. The company is transitioning away from this legacy segment, but the transition isn't painless.

• Near-Term Risks: Analysts project -0.8% revenue growth for 2025, and the net loss ($9.6M in Q1) underscores margin pressures. Debt remains manageable (Debt-to-Equity of 0.46), but profitability is critical.
• Long-Term Bet: The SaaS model is the lifeline. If Thryv can continue scaling SaaS (targeting 20%+ growth) and reduce legacy costs, margins could improve. The 103% NRR gives confidence in retention, but execution matters.

The Beta Paradox: Stability or Stagnation?

Thryv's beta of 0.976 suggests its stock is slightly less volatile than the broader market. This could imply stability, but it might also reflect investor complacency.

• For Bulls: A low beta means less downside risk in a downturn. If the company executes, the stock could rise steadily without wild swings.
• For Bears: A low beta could also signal a lack of catalysts. If growth stalls, the stock might languish near current levels.

Analyst Sentiment: A Split Decision

Wall Street is divided. While analysts like Morgan Stanley and BMO Capital assign “Strong Buy” ratings with $21.40 price targets (60% upside), Zacks' #4 “Sell” rating highlights near-term risks. The average target is $21.62, implying a 60% upside if Thryv meets expectations.

Risk-Reward Conclusion: A Contrarian Play, but With Caution

Thryv is a stock for investors who believe in its SaaS transformation. The $18.17 intrinsic value implies a 35% upside, but the journey isn't guaranteed. Key questions:

1. Can SaaS growth offset legacy declines?
2. Will margins improve to 1% by 2034?
3. Does the low beta mean resilience or stagnation?

For aggressive investors, the 35% undervaluation discount justifies a position—especially if you can stomach short-term volatility. For conservative buyers, wait for clearer signs of revenue stabilization and profit improvement.

Final Call: Buy with a 12-Month Target of $18–$21

The valuation gap and SaaS tailwinds make THRY a compelling bet for investors willing to look beyond the next 6–12 months. A $18–$21 price target (aligning with DCF and analyst averages) justifies a “Buy” rating. But set strict stop-losses—$12.50—if the stock breaks below support.

Historical performance of a buy-and-hold strategy triggered by positive earnings announcements has been poor. From 2020 to 2025, such a strategy underperformed the market, yielding a -35% return compared to a 58% benchmark return. This underscores the risks of relying on short-term catalysts, suggesting a longer-term holding period is more prudent.

Bottom Line: Thryv's valuation is too attractive to ignore, but this is a “hold for the long game” opportunity. The SaaS renaissance could make this a 2025 winner—if execution stays on track.