UPDATE: RBC Capital Assumes Smartsheet Inc. (SMAR), Downgrades to Sector Perform
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RBC Capital analyst Rishi Jaluria assumes coverage on Smartsheet Inc. (NYSE: SMAR) with a Sector Perform rating (from Outperform) and a price target of $65.00 (from $80.00).
The analyst offers three key points for the recommendation:
- Unique business focus. While most software project management tools are focused on technology users or individuals, Smartsheet is focused on business users and has seen over 2,000 documented use cases, ranging from finance to marketing to HR.
- Secular tailwinds. With work becoming more unstructured and collaborative, we believe there is increased need for Smartsheet solutions. We also believe this trend has been accelerated by the pandemic and that as companies think more strategically about optimizing for hybrid work, Smartsheet should see tailwinds start to emerge (which is why we view Smartsheet as a “Day Two” beneficiary of the pandemic).
- Rapid growth. While Smartsheet saw meaningful deceleration as a result of the pandemic (owing to SMB exposure and the more discretionary nature of Smartsheet, in our view),revenue is still growing rapidly, and we expect growth to reaccelerate exiting the pandemic, as the aforementioned tailwinds form
Shares of Smartsheet Inc. closed at $61.90 yesterday.
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