UPDATE: JMP Securities Downgrades Avalara (AVLR) to Market Perform
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JMP Securities analyst Patrick Walravens downgraded Avalara (NYSE: AVLR) from Market Outperform to Market Perform.
The analyst comments "While we like Avalara as it holds a leadership position as the tax compliance automation platform, especially for the mid-market and SMB segments, we believe the company is fairly priced as it was sold to Vista Equity Partners because: 1) several additional private equity firms contacted Avalara's financial advisor to express interest in potentially participating in a transaction after media reports published on July 7, 2022 speculated Avalara was considering a sale, but none proposed an independent acquisition of Avalara and none submitted any oral or written indication of interest following the initial contact, while no strategic party expressed interest; and 2) Avalara’s 2Q22 revenue came in below expectations ($208.6M vs. consensus of $209.2M) and there is uncertainty surrounding the company's expected performance for the remainder of 2022 due to execution challenges, sales capacity issues, high attrition in Avalara’s sales and marketing departments, and the expected further reduction in revenue from the company's relationship with a large European marketplace partner, all of which caused the company to lower its internal projections."
Shares of Avalara closed at $91.82 yesterday.
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