Cornerstone OnDemand (CSOD) PT Raised to $75 at Needham & Company

February 17, 2021 6:32 AM EST
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Price: $45.73 +0.33%

Rating Summary:
    14 Buy, 12 Hold, 1 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 18 | Down: 8 | New: 31
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Needham & Company analyst Scott Berg raised the price target on Cornerstone OnDemand (NASDAQ: CSOD) to $75.00 (from $50.00) while maintaining a Buy rating.

The analyst commented, "CSOD reported better than expected 4Q financial results with solid 4Q bookings as the company successfully navigated difficult HCM demand throughout 2H20. However, we were more impressed with FY21 guidance that clearly lays out the post-Saba acquisition operating model including a uFCF margin excluding final acquisition costs of nearly 30%. With CSOD expected to refinance its term loan, which is callable in April, uFCF guidance implies cash generation will enable debt repayment in less than four years and reduce leverage to less than 3x FY21 EBITDA, assuming conversion of the Silver Lake debt. We believe the result is a highly profitable operating module with little leverage that can be valued like profitable peer SaaS companies at 30x FCF or higher. Our new $75 PT reflects this 30x FCF multiple on our $218mm FY22 FCF estimate."

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