UPDATE: Citi Upgrades EngageSmart inc. (ESMT) to Buy

Citi analyst Ashwin Shirvaikar upgraded EngageSmart inc. (NYSE: ESMT) from Neutral to Buy with a price target of $31.00 (from $35.50).

The analyst comments "Following a beat-and-raise in its 3Q21 earnings report on Nov 10th, ESMT stock traded down materially to the low-$20s from the low/mid-$30s. While there seems to be multiple possible explanations offered for the move, none of these seem to suggest a fundamental change in the underlying EngageSmart story, which we believe is a good one, i.e., software/payments assets that can sustain healthy upper-20% growth in the intermediate term and steadily increase margins beyond FY22. We also believe there should be continued steady upside to expectations (the operative words being “steady upside” and not “blowout”) – not including positive optionality from pricing and corporate actions (M&A). Of course, sharp changes in valuation multiples must be understood and explained (and we do so below) but our view is that the extent of the downward move was not justified and we are opportunistically upgrading ESMT to a Buy with a $31 target."

For an analyst ratings summary and ratings history on EngageSmart inc. click here. For more ratings news on EngageSmart inc. click here.

Shares of EngageSmart inc. closed at $22.58 yesterday.

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