Wednesday, Couchbase Inc (NASDAQ:BASE) received an optimistic outlook from RBC Capital Markets as the firm increased the stock's price target to $35.00, up from the previous $32.00, while reiterating an Outperform rating.
The positive adjustment follows Couchbase's recent performance, which showcased a robust annual recurring revenue (ARR) growth of 25% and diminishing losses, attributed to improved consumption trends.
The company's growth has been significantly driven by its Capella database-as-a-service offering, which now constitutes 11% of its ARR. RBC Capital's stance reflects expectations of Capella's continued expansion within the company's revenue mix.
Despite the initial ARR guidance for the fiscal year 2025 indicating a 17% growth, which aligns with prior estimates, RBC Capital anticipates the potential for this figure to climb to over 20% as the year unfolds.
The analyst's commentary highlighted Couchbase's strong execution and the momentum building within the company, which underpins the decision to maintain the Outperform rating and elevate the price target. The firm's analysis suggests that the initial ARR projections for the upcoming fiscal year may be conservative, leaving room for upward revisions should the company's performance continue on its current trajectory.
Couchbase's recent financial results and the growth of its Capella product have clearly impressed RBC Capital, leading to a more bullish stance on the stock's future. The revised price target of $35.00 from $32.00 reflects confidence in the company's ability to sustain its growth rate and improve its financial position further.
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