Bentley Systems Inc. (BSY) PT Raised to $51 at Goldman Sachs

Goldman Sachs analyst Kash Rangan raised the price target on Bentley Systems Inc. (NASDAQ: BSY) to $51.00 (from $50.00) while maintaining a Neutral rating.

The analyst comments "We reiterate our Neutral rating and raise our Price Target to $51 ($50 previously) following Bentley’s F3Q results that saw Revenue come in -0.8% below Consensus primarily due to the headwinds from Cohesive Services Revenue and from China, while FCFM came in 10pp ahead of Consensus estimates. Bentley also remains confident about delivering the 100bps OpM expansion (incl. of stock-based compensation) for this year and the midterm while also raising the FCF conversion percentage to 85% of Adj. EBITDA (vs. 80% previously). The stock is indicated >2% as we believe investors, while acknowledging the minor miss on topline appreciate the consistent ARR growth (+12.5% ex. China vs +11.5% in F2Q24), which strongly positions Bentley to execute against its +11.75% ARR guide (CC) for FY24. We highlight the ongoing strength in Public Works and Utilities, where Bentley continues to be confident about the benefits from the consistent deployment of IIJA funding (40% announced, $1.2T bill) in the U.S. but also remain cautious about any potential change in the budget allocation mix due to the administration change. Bentley also saw solid international momentum where Management sees strength in the Indian market. Bentley’s latest strategic acquisition of Cesium broadens the SMB opportunity and helps advance the management’s focus on AI-driven digital twins. We prefer to remain on the sidelines as Bentley’s valuation profile (46x EV/FCF NTM) already reflects a considerable premium vs. Design comps (avg. 35x), especially when considering the very similar NTM Rule Of (NTM Revenue Growth + NTM FCF Margin) profiles (39 vs. peers 39)."

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