Duck Creek Technologies (DCT) 4 Key Takes on the 3Q Debacle, PT cut 28% at RBC Capital

RBC Capital analyst Rishi Jaluria lowered the price target on Duck Creek Technologies (NASDAQ: DCT) to $18.00 (from $25.00) after the company reported a disappointing F3Q22 with ARR growth decelerating and management offering below consensus guidance, causing a 16% aftermarket drop. Key takeaways include:
1) uncertainty continues to elongate sales cycles
2) a second challenged customer contract was renegotiated ($2M ARR impact)
3) management remains optimistic for FY23 given strong pipeline and resiliency of P&C insurance industry
4) Prima XL expands opportunity to reinsurance and helps internationally

The analyst reiterated an Outperform rating, stating "Stepping back, we were disappointed by another weak quarter but remain optimistic on FY23 given P&C should prove resilient given its nondiscretionary nature. We're lowering our PT on lower estimates but remain OP given the attractive risk/reward at these levels.".

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