On Friday, Craig-Hallum adjusted its outlook on Upland Software (NASDAQ:UPLD), reducing the price target to $2.50 from the previous $4.00, while reaffirming a Hold rating on the company's shares. The adjustment follows Upland's reported organic growth decline of -8% year-over-year for the first quarter, a trend that has been consistent over the past year, with similar declines in previous quarters.
The company's guidance anticipates a further -10% organic growth for the second quarter of 2024 and a -8% year-over-year for the full year 2024. Despite these figures, Upland Software's management highlighted positive developments in lead and pipeline generation. They also suggested that the full-year guidance subtly indicates potential limited improvements in organic growth towards the latter half of the year.
Upland Software is currently in the initial phase of a turnaround strategy, which includes phasing out $30 million in revenue over the coming years and implementing a variety of go-to-market (GTM) changes. However, these changes have yet to make a significant impact on the company's reported metrics.
Craig-Hallum's analyst emphasized that while there are signs of progress, the firm will maintain its Hold rating on Upland Software's stock until a more attractive risk/reward scenario emerges. The analyst's comments reflect a cautious approach, acknowledging the company's efforts but also recognizing the need for more substantial evidence of improvement before changing the investment rating.
InvestingPro Insights
In light of Craig-Hallum's recent price target adjustment for Upland Software, InvestingPro data and tips provide additional context for investors considering the company's stock. The market cap for Upland Software stands at a modest $72.43 million, reflecting the challenges the company faces. The revenue for the last twelve months as of Q1 2024 was reported at $291.53 million, with a notable decline of 7.64% year-over-year, aligning with the organic growth decline mentioned by Craig-Hallum.
InvestingPro Tips highlight that analysts have revised their earnings downwards for the upcoming period, and anticipate a sales decline in the current year, which may be contributing to the stock's high price volatility and its performance over the last month, where it has fared poorly. On a positive note, Upland Software's liquid assets exceed its short-term obligations, which could provide some financial stability in the near term. However, the company is trading near its 52-week low and has not been profitable over the last twelve months.
For investors seeking a deeper analysis, there are additional InvestingPro Tips available that could shed more light on Upland Software's financial health and market position. Using the coupon code PRONEWS24, investors can get an additional 10% off a yearly or biyearly Pro and Pro+ subscription to access these insights. With the next earnings date set for July 31, 2024, investors will be watching closely to see if the company's turnaround strategy begins to reflect in its financial performance.
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