Medallia Inc. (MDLA) Acquisition Rumors Send Shares Soaring, Needham & Company Handicaps Situation
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Needham & Company analyst Scott Berg reiterated a Buy rating and $40.00 price target on Medallia Inc. (NYSE: MDLA) after shares soared in Friday trading on rumors cited by Bloomberg that the company has hired advisors to explore a possible sale.
The analyst stated "We were not surprised by this rumor given how MDLA's shares have underperformed the broader NASDAQ since its IPO. We attribute the underperformance primarily due to MDLA's outsized exposure to pandemic-troubled industries. Overall, we believe an acquisition price of $36 - $40 per share (10x-11x EV/revenue multiple on our FY23 estimate) is fair value given current company fundamentals. We believe a financial rather than a strategic buyer is more likely to end up with the MDLA asset due to Salesforce's distraction with WORK and SAP already having Qualtrics. Should a strategic buyer step up, the most likely candidates are ADBE, MSFT, and WDAY, in our opinion."
Shares of Medallia Inc. closed at $33.11 yesterday.
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Related EntitiesNeedham & Company, Definitive Agreement, IPO
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