Needham & Company Raises Price Target on Pros Holdings (PRO) Following Analyst Day
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Needham & Company reiterated a Buy rating on PROS Holdings (NYSE: PRO), and raised the price target to $28.00 (from $25.00), following the company's analyst day. Management guided FY17 revenues to grow 6%-8% Y/Y, above street consensus at 5.9%. Management recalibrated their 2020 $500mm revenue and $100mm FCF target to 2022 which implies a revenue growth CAGR of roughly 30% from 2018 - 2022.
Analyst Scott Berg commented, "We attended Pros Analyst Day yesterday and came away more positive that lessons learned from its execution issues early in the Cloud transition are paying off with more consistent execution. We like the go-to-market changes to target its $30B TAM with more purpose-built vertical templates and vertically focused sales teams that can shorten the time to value which we believe has been the company's Achilles heel historically. Management reiterated near-term financial goals as expected but pushed out its $500mm revenue time frame 18 months which we believe partially reflects a lower services revenue mix versus changing end market demand. Lastly, management detailed it target SaaS metrics including CAC and LTV which, if achieved, could put the company in best-of-class for its LTV:CAC metric."
Shares of PROS Holdings closed at $24.23 yesterday.
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