UPDATE: KeyBanc Downgrades WalkMe Ltd. (WKME) to Sector Weight
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KeyBanc analyst Michael Turits downgraded WalkMe Ltd. (NASDAQ: WKME) from Overweight to Sector Weight.
The analyst comments "Downgrading to SW following a modest 1Q rev beat, but an ARR miss, decline in quarterly enterprise DBNRR, slowing RPO growth, and -3% 2Q rev guide miss following slipped large deals in 1Q. 2022 rev guide maintained despite 2Q miss. Encouragingly, mgmt indicated pushouts were expansions with existing 7-figure custs., delayed by need to work with procurement and by pricing discussion as they move up market, with some already closed in a strong 2Q start. While we view WKME's DAP as providing attractive enterprise ROI, the pushouts underscore DAP's still evangelical sale and steeper risks than for core front/back office software given inflation/potential recession. We are also more cautious on CF losses, with WKME at -31%/-25% 2022E EBIT/FCF margin. We look for sustained op. leverage and stabilization of large deal visibility to return to a more constructive stance on the stock and look to analyst day (5/24) for more details."
Shares of WalkMe Ltd. closed at $12.20 yesterday.
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