Benzinga - by Lekha Gupta, Benzinga Editor.
Piper Sandler analyst Brent A. Bracelin lowered ratings and revised estimates for several Cloud Applications and Analytics stocks.
The move reflects analysts' view on near-term demand stabilization trends that may not support 'an overly optimistic acceleration' in consensus growth rates, which are expected to increase by ~550bps to 19% in Q4 FY24 from 14% in Q4 FY23.
Also, the analyst writes that the budget priority has shifted in favor of testing and implementing generative AI features and thus creates a high risk of a 'potential H2 airpocket'.
The analyst is also concerned about 2024 growth on a meaningful slowdown in unique visitor growth for many SW stocks in September.
Despite this, the analyst still favors Microsoft Corp (NASDAQ: MSFT) on AI catalyst and Procore Technologies Inc (NYSE: PCOR) on manufacturing and government drivers.
Downgrades
The analyst lowered Salesforce Inc (NYSE: CRM) rating to Neutral from Overweight at a reduced price target of $232 (from $268) on high risks related to execution and M&A, AI monetization uncertainty, and risk-reward.
The analyst revised EPS estimates to $9.33 from $9.31 for FY24.
Bracelin trimmed Unity Software Inc (NYSE: U) to Neutral from Overweight and cut the price target to $30 (from $48) on probable downside risks to 2024 advertisement growth following the pricing-related disagreements with game developers.
The analyst reduced Asana Inc (NYSE: ASAN) rating to Underweight from Neutral at a trimmed price target of $16 (from $24) as renewal headwinds limit visibility to recovery timing. The analyst revised EPS estimates to $(0.37) from $(0.38) for FY23.
Also, Alteryx Inc (NYSE: AYX) is lowered to Underweight from Neutral, and the price target is maintained at $30 on the risk associated with the 2024 growth recovery. FY24 EPS estimate is trimmed to $1.28 from $1.30.
Bracelin downgraded Matterport Inc (NASDAQ: MTTR) to Neutral from Overweight at a lowered price target of $2 (from $4) as 2024 acceleration seems too optimistic. The analyst revised FY24 EPS estimates to $(0.13) from $(0.12).
Price Action: CRM shares are down 0.36% at $203.01, and MSFT shares are up 1.49% at $331.55 on the last check Monday.
Latest Ratings for CRM
Mar 2022 | Wedbush | Maintains | Outperform | |
Mar 2022 | Canaccord Genuity | Maintains | Buy | |
Mar 2022 | Raymond James | Maintains | Strong Buy |
View the Latest Analyst Ratings
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