JMP Securities Upgrades WageWorks (WAGE) to Market Outperform

December 10, 2018 3:56 AM EST
Get Alerts WAGE Hot Sheet
Price: $51.34 --0%

Rating Summary:
    2 Buy, 6 Hold, 0 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 17 | Down: 13 | New: 41
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JMP Securities analyst David Scharf upgraded WageWorks (NYSE: WAGE) from Market Perform to Market Outperform with a price target of $37.00.

The analyst coments "With our greater comfort level that WAGE has retained its key channel partners in the wake of last year’s loss, we still see a relatively stable and moderately defensive recurring revenue model with significant cash generation and operating leverage. And while the secular growth outlook for consumer-directed benefits other than HSAs is modest, Street estimates have already discounted this, and M&A opportunities remain. Based on several recent developments, the intensifying sell-off in the shares recently, and our discussions with management, we see a risk/reward trade-off that is now more biased to the upside. In particular, we note: 1) a compelling valuation based off of very slight growth assumptions; 2) our belief that inherent in the appointment of new auditors last month is a very strong commitment and plan to wrap up the audits and become an up-to-date SEC filer prior to the March 16 NYSE deadline; 3) the generation of over $160M of incremental cash in the 12 months since the 3Q17 10-Q was filed; and 4) the opportunity to engage in either accretive M&A or buybacks after the company satisfies its filing obligations."

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

Shares of WageWorks closed at $29.48 yesterday.

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