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RealPage (RP) Undervalued, Says Barrington Research

July 22, 2014 2:00 PM EDT
Get Alerts RP Hot Sheet
Price: $88.72 --0%

Rating Summary:
    10 Buy, 12 Hold, 1 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 13 | Down: 11 | New: 11
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Barrington Research maintained an Outperform rating on RealPage (NASDAQ: RP) with a price target of $25. Analyst Jeff Houston said the stock was undervalued in most scenarios.

"Amid industry headwinds and increased competition for 30% of its business, we are clearly disappointed with RealPage's continued execution issues but think the stock is undervalued. We suspect that the company is being presented with strategic alternatives, which could occur near our price target. Private equity firms have a history of acquiring struggling SaaS businesses and merging them with competitors. One potential buyer is Vista Equity as it owns ERP‐competitor MRI, as well as 5% of RealPage’s stock. Other prospects include Costar (NASDAQ: CSGP), Zillow (NASDAQ: Z), and privately‐held Yardi," said Houston.

"Since CEO Stephen Winn owns 33% of RealPage’s equity, it would be easier for a deal to occur with his support. However, since Mr. Winn does not own a majority, a hostile transaction could materialize. Outside of acquisition, an alternative is that management remedies execution issues and out‐smarts competition. In which case, the stock would recover organically," he added.

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

Shares of RealPage closed at $16.48 yesterday.



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