UBS Raises Price Target on Xactly Corporation (XTLY) to $15 Following 2Q
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UBS reiterated a Neutral rating on Xactly Corporation (NYSE: XTLY), and raised the price target to $15.00 (from $11.00), following the company's 2Q earnings report.
Analyst Brent Thill commented, "Top line metrics showed slight deceleration in FQ2 (billings of $25M grew +28% y/y vs. +31% in both the year ago Q and last Q; subscription revenues of $18.2M grew +27% y/y vs. +29% last Q) while XTLY showed strong improvements on the margin front – operating margins improved from -24% in F2Q16 to -9% this Q. We believe that the lighter top line performance may be due to lighter Q2 seasonality, as XTLY noted that its large deal pipeline is significant heading into the seasonally stronger back half of the year. While XTLY's consulting relationship with WIPRO is beginning to help internationally, the company announced a new relationship with Towers Watson, a positive sign that should lead to increased sales capacity and improving distribution networks. Although XTLY is making progress towards cash from operations positive in 4Q and FCF/OPM positivity thereafter, we are concerned that slowing growth this quarter highlights the company's specificity in incentive compensation management and smaller associated addressable market. We continue to monitor product suite expansion and success in adjacent modules such as Inspire (onboarding/training)."
Shares of XACTLY Corp closed at $14.82 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS Change, Analyst EPS View, Analyst PT Change
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