Tuesday, Baird maintained an Outperform rating on Bentley Systems Incorporated (NASDAQ:BSY), raising the price target to $60 from $59. The firm cites the company's strong positioning for the second half of 2024, expecting an acceleration in organic growth along with consistent EBITDA and free cash flow performance.
According to Baird, Bentley Systems is poised for success without the need for activist involvement, unlike its peer Autodesk (NASDAQ:ADSK), which has seen negative preannouncements. The firm also pointed out that Bentley has not been impacted by mergers and acquisitions activity that has affected ANSYS.
The optimism for Bentley Systems is further bolstered by positive feedback from resellers in international markets. These resellers have reported a quarter-over-quarter improvement in performance, which has been the best since records have been kept. The fiscal year 2024 growth outlook for Bentley Systems is also on the rise.
The analyst highlighted that the positive trends in non-U.S. markets are expected to benefit new account and seat performance, which is significant considering approximately 45% of Bentley Systems' revenue comes from outside the United States. Additionally, the U.S. market is anticipated to continue its strength, supported by ongoing investments in infrastructure.
Bentley Systems, recognized for its comprehensive software solutions for advancing infrastructure, is expected to leverage these positive developments to sustain and potentially increase its market presence as the year progresses.
In other recent news, Bentley Systems Inc. has seen noteworthy developments. The company's CFO, Werner Andre, was granted time-based restricted stock units as part of the company's 2020 Omnibus Incentive Plan. This move aligns the interests of key executives with those of shareholders. Bentley Systems also announced a Q2 dividend of $0.06 per share, reflecting its ongoing commitment to providing returns to investors.
Moreover, Mizuho Securities and Piper Sandler have shown confidence in Bentley Systems, with both firms raising their price targets for the company's shares following its first-quarter financial results. The company reported total revenues of $338 million, marking a 7% increase year-over-year. This positive start to fiscal 2024 was accompanied by a leadership transition, with CEO Greg Bentley retiring and COO Nicholas Cumins set to take over.
The company's recent financial performance and executive decisions demonstrate its efforts to drive success in the infrastructure engineering software market.
InvestingPro Insights
Following Baird's upbeat assessment, real-time data from InvestingPro aligns with the optimistic outlook for Bentley Systems Incorporated (NASDAQ:BSY). With a robust gross profit margin of 79.48% in the last twelve months as of Q1 2024, Bentley Systems showcases its strong ability to control costs and generate earnings. This is a crucial metric, as it indicates the company's efficiency in translating sales into profits, an aspect that Baird likely considered when maintaining its Outperform rating.
Moreover, the company is trading at a high Price / Book multiple of 16.51, reflecting the market's valuation of its net assets. This high multiple may suggest that investors are willing to pay a premium for Bentley's assets and future growth prospects. Additionally, Bentley Systems has a PEG Ratio of 0.4, which implies that the stock may be undervalued relative to its earnings growth potential. These metrics are particularly relevant for investors considering Baird's raised price target and the expected acceleration in organic growth.
For those seeking to delve deeper into Bentley Systems' financial health and future prospects, InvestingPro offers additional insights. There are 11 more InvestingPro Tips available, which can further guide investment decisions. To access these tips and a more detailed analysis, visit https://www.investing.com/pro/BSY. Remember to use coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
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