Piper Jaffray Assumes Concur Technologies (CNQR) with a Neutral
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Piper Jaffray assumes coverage of Concur Technologies (NASDAQ: CNQR) with a Neutral rating and a $36 price target.
The firm said, "CNQR shares currently trade at 50x CY09 PF EPS and 31x EV/FTM untaxed OCF, while we expect 20-30% multiyear organic growth. We believe this premium valuation reflects a strong recent pattern of exceeding guidance and already prices in an expectation for ongoing upside. While we view the franchise's leadership position and its growth opportunity very favorably, we note that: 1)Concur is about to enter its seasonally slower period for corporate travel (2H of CY); 2) investors tend to sell high-multiple stocks in recessions or inflationary environments; and 3) in our opinion the premium multiple off of untaxed cash flow does not embed much risk of a competitive move by American Express, which processes a large percentage of corporate travel transactions."
Piper also conducted a survey which indicated a decline in the number of business trips but a stable level of monthly expense reports. Therefore, the firm expects “Concur's revenue per customer linked to expense report volumes will remain consistent, while revenue per customer linked to corporate travel bookings (i.e.,Cliqbook) will decline."
The firm's checks also point to a near-term upside for Concur with acceleration in net customer adds. Therefore, Piper believes that CNQR is executing well and should be able to exceed Q3 consensus for both the top and bottom line.
Concur is an on demand software provider of corporate expense management.
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