Oppenheimer Raises Price Target on Ellie Mae (ELLI) Ahead of 3Q Report

Oppenheimer reiterated an Outperform rating on Ellie Mae (NYSE: ELLI), and raised the price target to $120.00 (from $110.00), ahead of the company's 3Q earnings report. Oppenheimer expects ELLI's operating margin to improve at least 300bps a year and total revenue to grow organically at a 25%+ rate over the next 12-24 months. Revenue forecasts are unchanged, 2017 and 2016 EPS estimates were cut by $0.04 each to reflect dilution from the new primary shares the company sold in 3Q.

Analyst Brian Schwartz commented, "We see Ellie Mae positioned to post solid September-quarter results, and we expect the strong momentum the business is currently experiencing to continue well into 2017. We think ELLI will increasingly become a must-own holding for mid-cap investors as the company is one of the best-run and fastest organic growth and profitable businesses in the SaaS industry. Additionally, there is an unusual dearth of growth impediments for the business over the next 12-24 months which makes the financial model highly predictable, mitigates estimate risks, and a good profit margin recovery story is taking shape. Bottom Line: We reiterate ELLI as a top pick; raise our target to $120 (from $110) on a better fundamentals story ahead; and recommend using market-related stock pullbacks to add to positions."

For an analyst ratings summary and ratings history on Ellie Mae click here. For more ratings news on Ellie Mae click here.

Shares of Ellie Mae closed at $99.59 yesterday.

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