Bank of America) analyst Adam Bergere started research coverage on Qualtrics (NASDAQ:XM) with a Buy rating and a $40.00 per share price target.
Bergere reminds investors that Qualtrics is arguably the pioneer of the vast $60 billion XM market.
"The company has proven a strong track record of execution thus far and we believe a CX/EX software adoption cycle is underway, fueled by broad DT mandates with companies increasingly adopting data-driven approaches," Bergere said in a client note.
The analyst says XM should be seen as a quality long term holding within a software investors portfolio.
"We expect the company to continue compounding at a strong rate over the next few years while also simultaneously demonstrating margin expansion/operating leverage, an increasingly rare (and more appreciated) combination within the higher growth application software cohort. We believe 20%+ top line growth is sustainable for many years given our belief that dollar-based net retention can sustain at the 125%+ level (was 128% in FY21), with potential for further upside from new business," he added.
Qualtrics stock price closed at $29.06 yesterday and is nearly unchanged today.
By Senad Karaahmetovic