Model N, Inc. (MODN) Conference Presentation Explains Away Recent Weak Guidance - Needham

Needham & Company analyst, Ryan MacDonald, reiterated a $34.00 price target on Model N, Inc. (NYSE: MODN) after the CFO, David Barter, spoke at the Needham SaaS conference and clarified one of the reasons the company guided below consensus for 2020 results.

The analyst reiterated the Buy rating stating "A key area of confusion for investors following the company's recent earnings report was the initial below-consensus guide for adjusted EBITDA in FY20. Management attributed the guidance to Model N's intention to migrate approximately 20 legacy customers to AWS in FY20. A number of these migrations are expected to begin in January and could take as long as 3-6 months. This creates a temporary pressure on gross margins as the company incurs duplicate costs across co-lo data center contracts and AWS hosting. We expect this headwind to be temporary, creating an opportunity for additional margin expansion in FY21 and beyond".

For an analyst ratings summary and ratings history on Model N, Inc. click here. For more ratings news on Model N, Inc. click here.

Shares of Model N, Inc. closed at $31.04 yesterday.

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