Oppenheimer Raises Price Target on Ellie Mae (ELLI) Ahead of 3Q Report
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Oppenheimer reiterated an Outperform rating on Ellie Mae (NYSE: ELLI), and raised the price target to $120.00 (from $110.00), ahead of the company's 3Q earnings report. Oppenheimer expects ELLI's operating margin to improve at least 300bps a year and total revenue to grow organically at a 25%+ rate over the next 12-24 months. Revenue forecasts are unchanged, 2017 and 2016 EPS estimates were cut by $0.04 each to reflect dilution from the new primary shares the company sold in 3Q.
Analyst Brian Schwartz commented, "We see Ellie Mae positioned to post solid September-quarter results, and we expect the strong momentum the business is currently experiencing to continue well into 2017. We think ELLI will increasingly become a must-own holding for mid-cap investors as the company is one of the best-run and fastest organic growth and profitable businesses in the SaaS industry. Additionally, there is an unusual dearth of growth impediments for the business over the next 12-24 months which makes the financial model highly predictable, mitigates estimate risks, and a good profit margin recovery story is taking shape. Bottom Line: We reiterate ELLI as a top pick; raise our target to $120 (from $110) on a better fundamentals story ahead; and recommend using market-related stock pullbacks to add to positions."
Shares of Ellie Mae closed at $99.59 yesterday.
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