On Thursday, Keefe, Bruyette & Woods adjusted their stock price target for Riskified Ltd. (NYSE: NYSE:RSKD), increasing it to $6.00 from the previous $5.75, while keeping a Market Perform rating on the stock. The adjustment follows the company's recent report of a strong quarter, which was bolstered by better-than-expected Gross Merchandise Volume (GMV) growth and gross margins.
The company's management has revised its EBITDA guidance upwards, albeit slightly, while maintaining the revenue outlook. They highlighted several positive developments, including significant wins in the tickets and live events sectors.
These wins are considered to be solidifying Riskified's competitive edge in these areas. Furthermore, the company has seen success with platform sales, securing initial deals for its standalone Policy Protect and Dispute Resolve services.
Despite these positive trends, there are concerns about weaknesses in Riskified's two largest business segments: fashion and luxury, and travel in the EMEA region. These concerns are expected to impact growth in the second quarter.
Still, management remains optimistic about a potential uptick in growth during the second half of the year, which is traditionally bolstered by summer seasonality and could be further aided by macroeconomic factors.
The firm's analysts have made a slight increase to their AEBITDA estimates for Riskified, which in turn has influenced the new price target. The Market Perform rating remains unchanged, reflecting a cautious but acknowledging stance on the company's current position and potential for future growth.
InvestingPro Insights
Following Keefe, Bruyette & Woods' recent update on Riskified Ltd. (NYSE: RSKD), an analysis of real-time data and InvestingPro Tips sheds further light on the company's financial health and market performance. Riskified holds a stronger liquidity position by maintaining more cash than debt on its balance sheet, an indicator of financial stability.
Moreovee, four analysts have revised their earnings estimates upwards for the upcoming period, reflecting a positive outlook on the company's profitability. The stock has also experienced a significant return over the last week, with a 22.38% price total return, showcasing investor confidence.
From a valuation standpoint, Riskified's market capitalization stands at $1.03 billion, with a high gross profit margin of 51.25% over the last twelve months as of Q1 2023. Despite the company not being profitable over the last twelve months, analysts predict that Riskified will turn a profit this year.
Still, the P/E Ratio remains negative at -19.54, indicating that the market is expecting future earnings growth. For investors looking for more in-depth analysis, there are additional InvestingPro Tips available, offering insights into Riskified's financial metrics and market trends.
For those interested in a deeper dive into Riskified's investment potential, InvestingPro offers a comprehensive suite of tools and analytics. By using the coupon code PRONEWS24, readers can get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, providing access to even more valuable insights to inform their investment decisions.
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